guided lower for the umpteenth time Thursday.
The Alameda, Calif., wireless gear provider posted a big third-quarter loss, driven in part by a big asset impairment charge. UTStarcom also said it would miss analysts' fourth-quarter financial targets and set further restructuring plans.
"UTStarcom continues to focus on meeting the opportunities and challenges we face as the company evolves," said CEO Hong Lu. "The challenges include narrowing our strategic product focus, expanding our worldwide sales, completing our corporate restructuring and improving our operational execution."
For the third quarter ended Sept. 30, UTStarcom lost $403 million, or $3.40 a share, against a year-ago profit of $5 million, or 4 cents a share. Revenue fell to $635 million from $645 million a year ago. The latest quarter included a loss of $341.4 million, or $2.89 a share, associated with long-lived asset impairment, the tax effect of the impairment and deferred tax asset valuation allowance. UTStarcom took the charges after "preliminary results of management's analysis determined that the fair values of the majority of the company's operating units are below their book values."
Analysts surveyed by Thomson First Call were looking for a 70-cent loss on sales of $627 million.
UTStarcom said its cost-cutting is coming right along. It said in May it was aiming to cut working capital by $200 million and operating expenses by $40 million a quarter, to $140 million per quarter. UTStarcom said it so far has reduced its working capital by $271.4 million and believes that it will approach the projected operating expense savings by the end of the fourth quarter.
"In addition, the company has identified new areas of targeted savings to be executed in the fourth quarter of 2005," UTStarcom added. "The Company is targeting to bring its total operating expenses closer to $130 million per quarter beginning in the first quarter of 2006. As such the company expects to incur restructuring charges of approximately $20-$25 million in the fourth quarter."
UTStarcom also guided to a 50-cent fourth quarter loss on sales of $665 million, where analysts surveyed by Thomson First Call were looking for a 15-cent loss on sales of $760 million.
Late Thursday, UTStarcom dropped a dime to $5.31.