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Avici lowers Q3 expectations

By Jim Duffy
The Edge, 10/04/02

Avici Systems this week warned that results for its fiscal third quarter, which ended Sept. 30, would be lower than expected.

The maker of terabit routers for the Internet core now expects revenue of $7 million and a pro firma net loss of $.32 to $.34 per share. Analysts were expecting revenue of $9.3 million and a loss of $.31 per share.

Third quarter revenue is down 25% from Q2.

"Market conditions for carrier equipment sales remain challenging," said Avici President and CEO Steve Kaufman, in a statement.

Avici did, however, land Qwest as a customer. The company announced that the service provider is now deploying Avici Stackable Switch Routers on a production basis in five U.S. cities. Qwest had been trialing the products for some time.

Qwest and AT&T account for 80% of Avici's revenue. The router maker has two other customers.

Avici is the latest telecom company to lower estimates for upcoming fiscal quarters. Nortel issued a second warning on its fiscal Q3, and Sonus Networks and Lucent also lowered expectations for their third and fourth quarters, respectively.

Avici recently laid-off 75 employees - 24% of its workforce - to better align costs with lowered revenue.

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