Foundry Founders on Weak Outlook

Updated from July 22

Foundry Networks ( FDRY) plunged 17% Friday after the company posted a weak second quarter and warned of a third-period shortfall as well.

For its second quarter ended June 30, the San Jose, Calif., maker of networking gear posted a profit of $15 million, or 11 cents a share. That's down from the year-ago $16.8 million, or 13 cents a share, and 3 cents short of the Wall Street analyst consensus estimate.

Revenue rose to $98 million from $95 million a year earlier, handily missing the $107 million Wall Street view.

"The Company experienced strong demand from the U.S. commercial enterprise market and a modest improvement in business from Japan," Foundry said. "Although revenue came in somewhat below the Company's expectations, orders received during the quarter would have been sufficient to reach the Company's revenue targets. However, an unexpectedly large volume of orders arrived late in the quarter and the Company was not able to build and ship all of these orders prior to quarter-end."

That aside, Foundry also guided lower for the third quarter, forecasting earnings of 11 cents a share on revenue of $105 million for the period ending Sept. 30. The Thomson First Call analyst consensus calls for a 15-cent profit on sales of $110 million.

Foundry shares dropped $2.02 to $9.60.

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