CellStar Corp. warned today that it expects its second-quarter revenues to be lower than those garnered in last year’s second quarter.
The company’s stock plummeted more than 11 percent, or 68 cents, to trade at $5.33 per share following the warning.
CellStar blamed the likely 10- to 14-percent decline on its discontinuation of distribution services for Cricket Communications last February and the lack of product availability from some of its major suppliers, including Motorola, late in the second quarter, which suppliers blamed on a shortage of CDMA chipsets.
The company also said its revenues in Asia Pacific will be down from last year, especially in Singapore and the Philippines, which are not included in its proposed initial public offering in Asia.
“This quarter’s revenues speak to the heart of the reason why we are working diligently to diversify our product and service offerings in the U.S. region,” explained Robert Kaiser, chief executive officer. “Since the handset business can be very volatile from quarter to quarter, it is very important that we begin to shift more of our revenues in the U.S. to products and value-added services that will provide more stable revenue-generating patterns and improved margins.”
The warning follows the resignation of CellStar’s chief financial officer, Paul Samek, earlier this week. Raymond Durham, previously vice president and corporate controller, was named to replace Samek, effective immediately.
