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UPDATE 1-Alvarion sees lower revenue, larger loss in Q1
April 5, 2012 / 3:37 PM / 6 years ago

UPDATE 1-Alvarion sees lower revenue, larger loss in Q1

* Sees Q1 revenue $33-$33.5 mln vs prior $38-$43 estimate

* Sees Q1 loss/shr ex-items 9-10 cents vs 1-6 cent loss view

* Deferred deal to Q2, weaker sales of old products cited

* Says in default on loans; shares down 26 pct on Nasdaq

JERUSALEM, April 5 (Reuters) - Wireless broadband technology firm Alvarion warned its first-quarter revenue and profit would be below prior estimates, sending its shares tumbling more than 25 percent.

The Israeli-based company said it will post quarterly revenue of $33-$33.5 million, below an earlier outlook of $38-$43 million. Its net loss excluding one-time items is projected at 9 to 10 cents a share, versus a previous forecast of a 1-6 cent loss.

Alvarion blamed lower sales of an older product line that it had planned to replace later this year as well as a $3 million order that was delayed to the second quarter from the first.

As a result, Alvarion said it will be in default of a financial covenant under certain loan and credit facility agreements, including a $30 million loan obtained by the company for the acquisition of Wavion Inc. The company said it had initiated discussions with the respective banks.

Its Nasdaq-listed shares fell 25.6 percent to 68 cents.

“Although we expected a decline in demand for certain older products ahead of their planned replacement later this year, we did not anticipate it would be of the magnitude we began to see in the last few weeks,” Eran Gorev, president and chief executive of Alvarion, said in a statement.

Gorev noted that Alvarion won several large carrier Wi-Fi product deals in Asia-Pacific, which will contribute to revenues in future quarters.

Alvarion said its second-quarter estimates and any revisions that may be required to 2012 targets will be provided when the company publishes its final first-quarter results on May 16.

The company, which has struggled to gain a foothold in the long-range wireless Internet sector with its WiMax products, had posted a smaller fourth-quarter net loss as expenses fell and while saying the purchase of Wavion last November would begin boosting earnings at the end of the first quarter.

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