Friday November 6, 8:00 pm Eastern Time
VTEL Corp issues Q1 '99 profit warning
AUSTIN, Texas, Nov. 6 (Reuters) - VTEL Corp., a maker of multi-media
visual communications systems, said Friday its first quarter fiscal 1999 enterprise hardware revenues fell ''substantially short'' of expectations, leading to a ''significant'' impact on earnings.
The company said its final consolidated results are not yet available. VTEL was expected to earn $0.04 in the first quarter, according to First Call Corp., which tracks analysts consensus estimates.
Despite sluggish hardware sales, the company said its software, network, personal/workgroup and global services units met expectations.
The company said it is finalizing reviews of capital and operating budgets to achieve positive earnings and cash flow performance at lower near-term revenue levels.
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They can not even make $0.04 on $180 million in revenue. Revenue falling, earnings falling (now several quarters in a row), watch the free flow cash flow...I bet it is negative too. Expect inventory write offs and layoffs. Management must act fast to stabilize the company. Look for a major restructure and another one time hit to earnings.
PLCM is growing revenues 30% EACH quarter and taking market share from both PCTL and VTEL. Their earnings have doubled each of the last two quarters and have surprised the street estimates by 100% each time. PLCM's sales will exceed $200 million by next quarter and earnings should be $0.15-$0.20/share.... watch they probably will report $0.25/share!
I really do not know what options VTEL has other than their service business. IMO their complete product line is obsolete and way over priced (almost 200% more). Perhaps they can somehow become an Internet company and leverage some new service business from their current customer base. WOW...how will they stop the bleeding? I did not expect things to get this bad this fast....
EKS |
