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Rainbow Technologies to Post Surprise Loss

Earnings: Irvine software maker blames delayed orders for job cuts and first-quarter slump.

April 03, 2001|From Times Wire Services

Rainbow Technologies Inc., an Irvine maker of anti-piracy and Internet-related software, said Monday that delayed orders will cause it to post an unexpected net loss in the first quarter and to cut staff.

The company said in a news release that it now forecasts a loss per share of 7 to 10 cents for the quarter, far off an earlier estimate of a profit of 6 cents a share.

A Thomson Financial/First Call survey of three analysts produced a mean earnings estimate for Rainbow of 5 cents a share for the quarter.

Rainbow said that major customers had delayed orders amid the continued economic slowdown and that it had cut its work force worldwide. But the company did not reveal how many employees were fired or how many jobs were eliminated. The company also said it is closely managing its expenses.

Rainbow said it would book restructuring charges and losses on securities of about $3.6 million in the first quarter.

In the release, Rainbow said demand for its secure communications products remained strong in the first quarter despite the broader slowdown and said it saw improved profitability over the rest of the year as a result of the restructuring.

Analysts surveyed by First Call estimated earnings of 38 cents a share for Rainbow's full year 2001. The company will announce its first quarter earnings May 2.

The news was released after the stock market closed for the day. Rainbow stock gained 19 cents to close at $5.19 a share on Nasdaq.

Reuters and Dow Jones Newswires were used in compiling this report.

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