I'm sorry (believe me, I really am sorry, as I own this stock), but this was yet another example of a stock trading down very sharply on inside information before it became public. Someone knew this bad news last week, and traded on it, and they should be thrown in jail.
OTTAWA, Sept 11 (Reuters) - CrossKeys Systems Corp. <CKY.TO> <CKEY.O> warned on Monday of lower than expected first-quarter revenues and earnings, saying it had failed to close two significant sales of its telecommunication software each worth more than $1 million.
The company, which makes network management software, said it expects revenues of between C$13 million and C$13.5 million in the quarter ended September 3, down from sales of C$14.5 million in the fourth quarter. In the corresponding quarter last year, the company reported sales of C$7.6 million.
CrossKeys said it expects to report a net loss of 34 Canadian cents to 37 Canadian cents per share, including one-time charges. Excluding those charges, the company expects a loss of 21 Canadian cents to 24 Canadian cents per share. CrossKeys ended the quarter with C$18.4 million in cash.
CrossKeys, which is 19.5 percent owned by French telecoms equipment maker Alcatel <CGEP.PA>, said it is reducing its revenue reliance on Alcatel. In the first quarter, 70 percent of CrossKeys' sales were from Alcatel, down from 90 percent in the fourth quarter. CrossKeys was formerly an affiliate of Newbridge Networks Corp., which Alcatel bought for $7.1 billion in February.
"We're still at a size of a company where one or two deals become critical," said CrossKeys' chief executive Ian McLaren in a conference call. The company said it failed to close two major deals worth more than $1 million each and two others worth less than $1 million, but expects those deals to be completed in the second quarter.
"The estimates of the analysts that are covering us right now range, I believe in the C$75 million range for revenue and we're still comfortable with that," said McLaren.
The company will report its results on September 27. |
