PictureTel Announces That Fourth-Quarter Revenue and Earnings Will be Lower Than Analysts' Expectations
Business Wire - January 06, 1999 18:00
ANDOVER, Mass.--(BUSINESS WIRE)--Jan. 6, 1999--PictureTel Corporation (Nasdaq:PCTL) said today that revenue for the fourth quarter ended December 31, 1998, will fall short of analysts' expectations. The company anticipates revenue of approximately $98 million for the quarter, about 4 percent below its third-quarter 1998 revenue. Analysts generally expected fourth-quarter revenue of 3 percent to 7 percent above the third quarter. As a result, PictureTel said it expects to report an operating loss of as much as $6.0 million for the quarter before a charge for acquired in-process research and development associated with the acquisition of Starlight Networks, Inc., which was completed in the fourth quarter. The amount of the charge has not yet been finalized and audited.
The lower-than-expected revenue is related primarily to a delay in shipping its new SwiftSite(tm) II compact videoconferencing system, the company said. PictureTel previously planned to ship the product in the fourth quarter, but units will not ship until the first quarter of 1999. PictureTel believes that the unavailability of SwiftSite II units also caused some customers to defer purchases of the company's other videoconferencing systems in the fourth quarter. Sales of Concorde 4500(tm) and Venue 2000(tm) group videoconferencing systems were essentially flat with the third quarter, while service revenue is expected to be consistent with company expectations.
"Compact systems, a category we created in 1996 with our hugely successful SwiftSite product, is the hot segment of the videoconferencing market right now," said Bruce R. Bond, chairman and CEO of PictureTel. "Our delay in delivering SwiftSite II meant that we didn't have a competitive product in this segment for the past few months. However, we expect this situation to turn around as we begin shipping SwiftSite II in the first quarter. In fact, we currently have orders for several million dollars of SwiftSite II systems."
Following a previously disclosed review, PictureTel also said it will record a fourth-quarter tax charge totaling approximately $35 million to establish a full valuation allowance against otherwise recognizable net deferred tax assets.
"It is important to note that while these favorable tax benefits will be fully reserved under applicable accounting standards, they remain available to offset future taxable income," said Art Fatum, PictureTel's vice president and chief financial officer.
PictureTel is in the process of consolidating its final results, which will be available when the company issues its regularly scheduled quarterly earnings announcement on February 25, 1999.
This release includes projections and other forward-looking statements about the company's revenues, earnings, and other measures of economic performance. Actual results could differ materially from forecasts due to many factors such as, for example, competitive pressures, changes in technology and the difficulty of forecasting in overseas markets and indirect channels. Additional information concerning risks that could cause actual results to differ is contained in the company's annual report on Form 10K as filed with the SEC. The company undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
PictureTel is a registered trademark and SwiftSite, Concorde 4500, Venue 2000 and Anywhere Now are trademarks of PictureTel Corporation.
CONTACT: PictureTel Corporation
Kevin Flanagan, 978/292-5178
flanagank@pictel.com |
