slid 8% as the wireless gear supplier cut revenue guidance yet again.
UTStarcom also posted a second-quarter loss and named a new financial chief. The news comes as the Alameda, Calif., wireless supplier struggles with a major restructuring and
problems with its accounting.
UTStarcom shares have lost more than half their value of the past year as the company has reported a number of earnings shortfalls and set plans to cut more than a thousand jobs.
For the second quarter ended June 30, UTStarcom lost $75 million, or 65 cents a share, reversing the year-ago profit of $44 million, or 33 cents a share. The latest-quarter loss includes 28 cents a share worth of charges and 8 cents worth of debt-extinguishment gains.
Revenue rose 5% from a year ago to $723 million, and the company's gross profit margin slid to 15% from 26% a year earlier.
"This was a constructive quarter for UTStarcom. Our primary focus was on the restructuring plan that we announced in early May. The plan is designed to realign our cost structure with the changing dynamics of our key markets in order to bring the Company back to consistent and sustainable levels of profitability. I believe that we have made significant progress in our restructuring initiatives and expect to complete the implementation of the plan in the third quarter of 2005," said CEO Hong Lu. "In addition, the Company is committed to continually reviewing and adjusting its cost structure to optimize operating efficiency and financial profitability."
UTStarcom guided toward a third-quarter loss of 35 cents to 40 cents a share on revenue of $670 million. Analysts surveyed by Thomson First Call had forecast an 8-cent loss on revenue of $778 million. UTStarcom said its projections included $5 million to $10 million worth of restructuring charges aimed at covering remaining job-cut costs.
The company also hired
finance chief Fran Barton to be its chief financial officer. The company's previous chief financial officer, Mike Sophie, will remain operating chief.
"I believe that Fran's background represents an optimal fit for the needs of our finance organization as we go through the restructuring and diversification initiatives," said Sophie. "His appointment will allow me to focus on the operating aspects of these initiatives. Fran and I will work closely toward disciplined execution of UTStarcom's strategy and timely attainment of the company's goals, including a return to sustainable revenue growth and profitability."
Late Tuesday, UTStarcom shares fell 69 cents to $7.85.