VANCOUVER, British Columbia—Sierra Wireless Inc.’s stock fell nearly 23 percent after the company reported solid second-quarter results, but lower-than expected third-quarter guidance.
The company’s stock was trading at about $12.55 Friday morning after closing at $16.25 Thursday.
Revenues for the quarter totaled $55.2 million, more than double revenues of $21.9 million during the same period last year and beating company guidance of $52 million. Revenue during the first quarter was $45.2 million. Earnings per share of 15 cents beat its guidance of 10 cents per share and reversed a net loss per share of 30 cents reported during last year’s second quarter. EPS during the first quarter was 10 cents.
The second-quarter results beat analyst expectations of EPS of 10 cents on revenues of $52.05 million for the quarter.
Jason Cohenour, president and chief executive officer of the company, attributed the company’s solid second quarter to momentum in sales of its HSDPA and CDMA2000 1x EV-DO AirCard PC Cards along with increasing embedded module sales to worldwide laptop original equipment manufacturer customers.
However, the company’s guidance disappointed investors. The company said it expects revenues of $51 million and breakeven earnings per share. Analysts were expecting EPS of 12 cents on revenues of $57.41 million.
“During the third quarter of 2006, we expect to see a modest decline in revenue relative to the second quarter as we transition some of our largest customers to our next generation AirCard products late in the quarter,” said Cohenour. “We expect that the launch of the AirCard products late in the third quarter, combined with shipments of additional new products later in the year, will drive strong revenue growth in the fourth quarter. We believe that the overall market is experiencing considerable growth and that our market position continues to strengthen.”
