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Xionics drops on warning
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December 22, 1997: 12:40 p.m. ET
Document technology company says new price model, Asia, hurt profits
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NEW YORK (CNNfn) - Shares of Xionics Document Technologies Inc. plunged Monday after the company predicted its earnings for the second quarter would fall far short of expectations.
Xionics shares (XION) fell 4 to 5-7/8 in late morning trading Monday.
Xionics, a maker of chips and software for document processing equipment, said it expected its fiscal second-quarter revenues to total approximately $8.7 million and its net income to be about 2 cents per share.
The First Call consensus of analysts' estimates predicted Xionics earnings of 10 cents per share.
Xionics blamed the weaker results on a variety of factors, including changes in the company's technology licensing agreements and turmoil in the Asian markets, from which Xionics gets about 15 percent of its revenues.
The company has traditionally asked its customer to pay access fees and royalties in advance, but CEO Peter Simone explained that "fierce competition, particularly for U.S. customers has meant that Xionics has had to adjust to this new model which reduces up-front payments."
The company also warned that its business results over the next year to 18 months could also be affected by these changes.
Xionics will announce its second quarter results on Jan. 20, 1998.
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