A little negativism among the positivism ...
Radisys is a fantastic company out of Portland
that make embedded products (OEM, custom) for
lots of small and big companies. Take a look
at their outlook for the embedded market ...
RADISYS CORP. (RSYS) 31 5/8 CLOSED. Maker of computer solutions
used by OEMs warned last night that both Q1 and Q2 results
will come in below market expectations. Results in Q1 are
expected to be hurt by order push-outs and reductions from a
number of customers, while Q2 results will be handicapped by its largest customer, which the company did not identify, not
placing an order in Q2 due to excess inventory levels. In Q1,
this particular customer had orders totaling $8 million. Hence,
due to the weakness in orders during the first two quarters of
the year, this supplier of computer components and subsystems
will come in shy of market earnings expectations. And looking
towards Q3, the weak trend in orders are likely to affect
this quarter as well, although RadiSys will take measures
to reduce costs in order to better balance its slowing revenue.
RadiSys now expects Q1 earnings to come in between $0.38 and
$0.40 a share, well below the First Call mean estimate of
$0.50 a share as revenues will most likely fall $1 to $1.5
million below market projections. In the year-ago Q1 period,
RadiSys earned $0.43 a share on revenues of $27.8 million.
For Q2, the company did not provide earnings projections, but
expects to be profitable with revenues of about $28 to $30
million, which is also below market expectations. Wall Street
was expecting RadiSys to earn $0.55 a share in Q2, versus
year-ago net of $0.46 a share on revenues of $29.8 million.
The earnings warning, although not that unexpected, is very
telling of the difficulties being experienced in the
embedded computer components sector, and more so because the
weakness in orders is expected to last well into the third
quarter of the year. This implies that a quick turnaround is
not just around the corner. Instead, earnings for much of
1998 will be lower for the sector in general due to the excess
supply that prevails in the OEM market. |
