The news came as the Alameda, Calif., maker of wireless-network gear posted earnings for the third quarter. For the quarter ended Sept. 30, UTStarcom earned $5 million, or 4 cents a share. That's down from the year-ago $59 million, or 46 cents a share, but a penny ahead of the Wall Street analyst consensus estimate provided by Thomson First Call.
Sales rose 10% from a year ago to $645 million. Analysts had been expecting $591 million in sales.
Looking ahead to the fourth quarter, the company expects less than a penny of profit on sales of about $880 million, which includes $250 million in delayed revenue from
. Wall Street had been expecting a 7-cent profit on sales of $822 million.
For 2005, UTStarcom expects to post a GAAP profit of $2 per share on $4 billion in sales. Those numbers are ahead of the Wall Street estimate, but they include about $900 million in proceeds from the newly acquired
UTStarcom has been a serial warner this year, having cut its financial projections twice in four months. The company last month lowered its third-quarter estimates, blaming the timing of a $290 million contract with Japan Telecom and the slowdown in its personal access system phone sales in China. In August, UTStarcom warned that it faced "challenges" in meeting the requirements of the Sarbanes-Oxley Law of 2002, which calls for top execs to sign off on their books and stand behind their financial controls.
The company says it has since hired a chief accounting officer and a chief quality officer and intends to "continue its efforts and progress not only this year, but on an ongoing basis into 2005."
Shares dropped 51 cents to $16.91 in after-hours trading Tuesday.