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Powerwave's $9.5-Million Loss Tops Analyst Forecasts

Wireless: Santa Ana firm loses 15 cents a share in the first quarter, 2 1/2 times more than expected.

April 13, 2001|Reuters and Bloomberg News

Powerwave Technologies Inc., a maker of components for wireless-telephone networks, posted a first-quarter loss Thursday that exceeded analysts' expectations, as sales fell almost 30%.

The Santa Ana company, which warned last month that it expected a loss, said results were hurt by "significant order reductions" by makers of wireless-telephone equipment amid the economic slowdown.

Powerwave lost $9.5 million, or 15 cents a share, in the period ended April 1, compared with net income of $10.3 million, or 16 cents, a year earlier. Sales fell to $73 million from $103.9 million.

Analysts had expected a loss of 6 cents a share, according to a survey by First Call/Thomson Financial.

The results were announced after regular U.S. market trading hours. The shares moved up $1.60 to $13.42 during the session but fell as low as $11.90 in after-hours trading.

Powerwave shares have fallen 37% in the last four weeks and 83% so far this year. The Nasdaq Composite index is down about 20% this year.

In a conference call, Powerwave projected full-year revenue of $400 million with earnings of 10 cents a share, sharply lower than the $500 million in revenue and earnings near 29 cents that analysts had forecast. For the second quarter, the company projected a return to "very modest profitability."

Powerwave President and Chief Executive Bruce Edwards said the brand-name manufacturers that form its customer base had sharply cut back on purchases for existing phone networks in the last quarter amid the broader economic uncertainty.

"I think everyone wants to get a better feel of what the market is," he told analysts.

Powerwave has concentrated on amplifiers for third-generation cellular phone networks, he said, equipment that will bring a clearer signal to the next-generation phones that are expected to feature broadband Internet capabilities.

Powerwave began shipping these amplifiers to Nortel Networks Corp. and Nokia in the last quarter, sales that accounted for 20% of total revenue, Edwards said.

Nortel was Powerwave's largest customer in the quarter, representing about 37% of revenue, the company said.

Cingular Wireless, a joint venture between SBC Communications and BellSouth, Verizon Wireless, a unit of Verizon Communications, and Samsung Electronics each accounted for 10% or more of revenue, the company said.

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