SAN DIEGO—Network design and engineering firm Wireless Facilities Inc. reported a net loss during the fourth quarter of $3.4 million, a reversal from its net income of $12.3 million during the same quarter of 2004.
The net loss included a $5 million deduction due to its discontinued business in Latin America, while the previous year’s net income included an income tax benefit of $10.7 million.
The company also announced it is revising its second- and third-quarter 2005 results to reflect the accounting impact of cancellation of sites by a customer in Mexico. The total impact is expected to be a reduction of $4.8 million in revenues and $1.3 million in net income for both quarters and will be reflected in amendments filed together with the company’s annual report.
WFI reported revenues for the fourth quarter of 2005 of $94.8 million, up about 7 percent from revenues of $88.4 million in 2004. The company attributed the increase to engineering, deployment and optimization services performed for its largest customers, including Cingular Wireless L.L.C. and Sprint Nextel Corp., as well as continued growth in its federal government business activities.
Analysts had expected the company to report revenues of $109.1 million.
The company’s stock was down more than 10 percent after the news to around $4.29 per share.
The company said it continues to make progress in building its federal government wireless business, with nearly 25 percent of its business now coming from government agencies. In addition, the company said the recent sale of its Mexican operations gives it cash going forward to fund growth in its domestic commercial wireless business and government business areas. During the fourth-quarter, WFI announced a contract with the U.S. Navy, several municipal Wi-Fi contracts and a wireless carrier contract for its value-added diagnostics services.
“We believe the transition from operating primarily in the wireless space to focusing more attention on the government and enterprise space will take time, with potential bumps in the road,” wrote Avondale Partners in a research note on the company. Avondale makes a market in the securities of WFI.
In related news, WFI said a U.S. district court has dismissed claims against the company filed in a class-action lawsuit in 2004.
