Westell, which makes modems for high-speed digital subscriber lines (DSL), fell $3.06, or 34%, to $5.94 Thursday.
Westell on Wednesday announced that it earned 1 cent per share in its second quarter ended Sept. 30. However, analysts had estimated it would earn 8 cents a share, according to
First Call/Thomson Financial
. In the year-earlier period, it posted a loss of 8 cents a share.
Revenue for the second quarter was $105.5 million, compared with $25 million for the year-ago quarter. The company said revenue for the fiscal year ending March 31, 2001 would be $400 million to $425 million.
Westell's difficulties lay in the size of its customer base, said Ilya Grozovsky, an analyst with
. Westell has only three large customers,
, Grozovsky said. SBC's well-publicized problems with DSL service hurt Westell's sales, said Grozovsky, who downgraded the stock to market perform from buy. (Chase H&Q has done recent underwriting for the company.)
"There is limited visibility in the next couple of quarters," Grozovsky said. "If the company can diversity away from three customers, it should be able to do fine."