Extreme Networks Reduces Guidance

Extreme Networks (EXTR Quote) said on Thursday that it expects to miss Wall Street's earnings projections for the fiscal third quarter, and the company set plans to cut an unknown number of employees.

Extreme said it expects to post a loss of 6 cents to 8 cents a share, before charges, in the fiscal third quarter. The networking company cited weakening economic conditions as the reason for the reduction. Sixteen analysts polled by Thomson Financial/First Call are expecting the company to post earnings of 12 cents a share in the quarter, up from 8 cents in the year-ago period.

Extreme also said revenue should be about $110 million to $115 million.

Shares of Extreme, which is based in Santa Clara, Calif., gained $3.28, or 25.8%, to $16.01 in regular-session Nasdaq trading, but dropped to $14 in recent after-hours Island activity.

The company is considering cost-cutting initiatives aimed at reducing its cost structure by 10%, which could include a reduction in expenses and employees. Extreme expects to record $2 million in charges in the third quarter and $4 million in charges in the fourth quarter. The company also expects to take a $41 million charge in the third quarter for asset impairments, write-downs for minority investments and excess inventory.

Extreme is scheduled to report financial results on April 18.