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Newbridge shares tumble
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May 5, 1999: 11:50 a.m. ET
Stock falls 25% after networking company warns of poor 4Q results
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NEW YORK (CNNfn) - Shares in Newbridge Networks Corp. lost about 25 percent of their value on Wednesday after the networking equipment supplier warned its fourth-quarter results would be worse than expected.
Stock in Ontario-based Newbridge Networks (NN) was trading down 8-13/16 in late morning trading Wednesday at 28.
A day earlier, Newbridge warned of poor results due to difficulty in managing the supply line. Revenues for the February-April quarter are expected to total $460 million with operating earnings reaching 12 to 14 cents per share, the company said in a revised forecast Tuesday. Analysts polled by earnings tracker First Call Corp. had predicted profit of 21 cents per share for the quarter.
Not only will results for the latest quarter be lower than expected, but the performance outlook for the next few quarters is also somewhat dismal for the company, said Mark Cavallone, an analyst at S&P Equity Group.
"It turns out that while demand is strong for their products, they have problems meeting that demand," he said. "There could be a few more quarters of choppy results."
Newbridge stock had been on a good run in the last few months over speculation that the company may be bought out, Cavallone said. The stock had peaked at a 52-week high of 39-7/8.
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Newbridge Networks
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