CARROLLTON, Texas-CellStar Corp. said it expects to report an increase in revenues for the fourth quarter, but the increase will fall short of company and analyst expectations.
CellStar expects revenues to reach about $685 million with net income, excluding non-operating items, of between 20 cents and 23 cents per diluted share, compared with fourth quarter 1998 revenues of $642 million and net income of 16 cents per diluted share.
“With these preliminary results for the fourth quarter, we are pleased that we will deliver the most profitable bottom line year in CellStar’s history,” said Alan H. Goldfield, chairman of the board and chief executive officer of CellStar. “Revenues for the fourth quarter, however, fell short of our goal and analysts’ expectations primarily because of a global shortage of handsets.”
CellStar’s fourth quarter also benefited from the previously announced sale of the company’s remaining debt and equity interest in Topp Telecom Inc. for $26.5 million in cash. This was countered somewhat by an after-tax charge of approximately $3.5 million to reduce the carrying value of CellStar Poland prior to its sale.
“Our decision to sell CellStar Poland is based on our analysis that under the present market conditions in Poland, we would be unable to grow it to a scale that would enable it to fit our long-term strategy,” Goldfield commented.
