was downgraded by at least two brokers after the company posted what Deutsche Bank called an "ugly" first quarter and said it expects the disappointing results to continue.
Terayon, the maker of broadband access modems, said it lost $4.1 million, or 6 cents a share, on a GAAP basis, compared with a loss of $508.2 million, or $7.53 a share, in the year-ago quarter. Excluding noncash charges relating to amortization, goodwill writeoffs, restructuring, and debt retirement, the company lost $3.9 million, or 5 cents a share, compared with a loss of $29.3 million, or 43 cents a share, in the year ago quarter.
On a pro forma basis excluding favorable changes in inventory reserves and vendor cancellation exposures, the company lost $15.3 million, or 21 cents a share. On that basis, analysts polled by Thomson Financial/First Call had expected the company to lose 15 cents a share.
Quarterly revenue rose 6% to $57.2 million from $54.0 million last year, as cable business revenue grew 23%. Telecom revenue was down 76%, and the company said its cable business now accounts for 95% of its revenue.
Looking ahead, Terayon said it expects results to continue to be well below estimates. The company now sees a second-quarter loss of 25 cents to 40 cents a share on revenue of $50 million to $60 million, compared with First Call analyst estimates of a loss of 15 cents on revenue of $77.9 million. For the full year, the company sees a loss of 75 cents to $1.00 a share on revenue of $200 million to $250 million, compared with analyst estimates of a loss of 50 cents on revenue of $307.23 million.
Deutsche Bank downgraded Terayon to market perform from buy, saying it was concerned with Terayon's ability to generate profitability out of the modem business given falling prices. Separately, Lehman cut its rating on Terayon to market perform from buy, setting a new $4 to $5 price target on the stock.
Shares of Terayon were plunging 27% to $3.58 in Instinet trading after closing at $4.92 Monday.