Netopia (NTPA) expects to report third-quarter losses wider than analysts' estimates as component costs hurt Internet equipment gross margins.
The company said in a press release after the bell Tuesday that it expects to lose 13 cents to 15 cents a share. On an adjusted basis, Netopia expects to lose 11 cents to 13 cents a shares -- wider than the consensus analyst estimate for a loss of 3 cents a share.
However, the company expects revenue of $25.3 million and $25.6 million, above the Thomson First Call estimate of $24 million and last year's $22 million.
The broadband and wireless product maker said that Internet equipment gross margin was hurt by component cost increases, particularly with respect to flash storage and DRAM memory used in Netopia's modems, routers and gateways, and decreases in average selling prices to several carrier customers.
Primarily because of the decrease in Internet equipment gross margin, Netopia believes that corporate gross margin on a GAAP basis will fall to between 31% and 32% for the third quarter from 40.5% a year earlier.
Shares of Netopia fell more than 20% in after-hours trading after finishing the regular session down 54 cents, or 8.5%, to $5.83.
Netopia will release second-quarter results on July 22.