Tuesday May 4, 7:41 pm Eastern Time
Canada's Newbridge warns to post shortfall, again
(All figures in U.S. dollars unless otherwise noted)
TORONTO, May 4 (Reuters) - Canadian computer networking and telecommunications firm Newbridge Networks Corp. (NNC.TO - news) (NN - news) warned analysts that its financial results would fall short of forecasts for the second consecutive quarter.
Newbridge, based outside of Ottawa, said late on Tuesday that operating earnings for its fourth quarter, ended May 2, would come in at 12 to 14 cents a share.
Most analysts polled by N.Y. research house First Call estimated earnings would reach 21 cents a share. That was the average of predictions ranging from 18 to 22 cents a share.
In its previous quarter, Newbridge also disappointed The Street, earning 17 cents a share which was five cents less than analysts generally forecast.
''We're deeply disappointed,'' said Chief Operating Officer Alan Lutz in a conference call with analysts.
''I'm not trying to hide behind a rock,'' Lutz said. ''We expect people to criticize our ineptness.''
Lutz said that Newbridge had record order flows that escalated toward the end of its fourth quarter, but failed to process the orders quickly enough.
Order intake totaled about $550 million, but when midnight struck on May 2, leftover orders amounted to $115 million.
The company plans to unveil the results of its attempts to fix the problem on June 1, but Lutz added this processing problem would affect them for the next two quarters as well.
''I'm concerned about my credibility to each of you,'' Lutz told analysts. ''I fully expect that there's going to be a series of downgrades tomorrow.''
''It's a credibility problem. There's no way you can paint this any other way,'' said Rob MacLellan, analyst at CT Securities.
''Everybody has a bad quarter once in a while.'' MacLellan pointed out. However, ''every time this happens, being Newbridge or anybody else, they have to exponentially increase the amount of work in front of them that they have to undertake, if you will, to restore their credibility in the eyes of analysts.''
Newbridge has warned it would fall short of analysts' estimates several times in the last two years.
The bad news was released after North American markets closed. By the day's end Newbridge's stock fell 40 Canadian cents to C$53.60 on the Toronto Stock Exchange. In New York shares slipped 56 cents to $36.81.
($1=$1.45 Canadian)
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