Wireless Facilitiesundefined tumbled 19% Monday as the company was hit by the recent Gulf Coast hurricanes and troubles at its Latin American unit.
For the third quarter ended in September, the San Diego wireless infrastructure and antenna operator made $5.8 million, or 8 cents a share, on sales of $108.9 million. That compares to an adjusted profit of 5 cents a share on $95.8 million in revenue in the year-ago quarter.
Analysts were looking for an 8-cent profit on $118 million in sales, according to a Thomson First Call tally.
The weakness came, the company said, when it "encountered significant operational issues" in Latin American operations. "Cost overruns were identified resulting in a change in estimates on certain fixed price contracts, and we determined that out of scope and additional work had been performed without formal documentation and formal pricing increases, resulting in a total adjustment of approximately $3 million," the company said.
"We have taken corrective action and are in the process of implementing a reorganization of our entire Latin American operations," the company said in a press release Monday. The mess in Latin America will cut about $15 million from its top line in the current fourth quarter ending in December.
Looking ahead, the company expects to make 5 or 6 cents a share for the fourth quarter, with revenue flat with third-quarter levels. Analysts surveyed by Thomson First Call were looking for a dime a share in profit on sales of $135 million.
"Revenue and profit in the fourth quarter will also be negatively impacted by delays and increased cost estimates in our domestic deployment business for both carrier and enterprise customers, in large part as a result of the effects of labor and material shortages in the southeastern U.S. stemming from the recent hurricanes," the company said. "With nearly 60% of our enterprise business and significant deployment projects for a major carrier in the southeastern U.S., we are seeing significant short-term impacts to our business from higher costs of both raw materials and subcontracted construction related labor. We are attempting to work with our customers on an equitable resolution of these unexpected costs and delays; however, at this point we have no assurance that we will be successful in this endeavor."
WFI says its domestic business was strong and pointed to two areas of promise: contracts with the Defense Department to provide radio frequency identification services, and growing
on municipal wireless network projects.
WFI shares fell $1.30 to $5.52 in early trading Monday.