UPDATE 2-SR Telecom forecasts losses, seeks financing
Wed Jan 19, 2005 04:29 PM ET
OTTAWA, Jan 19 (Reuters) - SR Telecom Inc. (SRX.TO: Quote, Profile, Research) (SRXA.O: Quote, Profile, Research) warned of losses in its fourth and first quarters on Wednesday, blaming delays in orders for its telecommunications equipment and lower production due to dwindling credit.
... The stock sank 31.5 percent, or 82 Canadian cents, on heavy trade to close at C$1.78 on the Toronto Stock Exchange.
... Blaming unexpected delays in receiving purchase orders under existing contracts and the delay of some shipments into the first quarter, SR Telecom forecast fourth-quarter revenue between C$22 million and C$25 million. That is down from third-quarter sales of C$37.4 million and a sharp decline from year-ago revenue of C$41.6 million.
The company also said it will not break even in its core wireless business in the quarter, generating instead a "significant loss".
It also warned of a "significant" first-quarter loss, on the basis of earnings before interest, tax, depreciation and amortization. SR Telecom said a reduction in available supplier credit crimped raw material purchases, resulting in a production slow down.
At the end of the fourth quarter, the company said it had about C$6.9 million in cash, of which approximately C$1.9 million was restricted. It had C$18.3 million in cash at the end of the third quarter.
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