CARROLLTON, Texas-Value-added wireless products distributor CellStar Corp. reported a first-quarter net loss of $16.8 million, or 82 cents per share, on revenues of $507.1 million.
The latest results represented a decline from the year-ago quarter when the company posted net income of $11.4 million, or 90 cents per share, and revenues of $629.2 million.
CellStar attributed revenue losses to three primary causes: increased competition from local manufacturers and increased demand for lower-priced handsets in China; operations that the company exited last year in the United Kingdom, Peru and Argentina; and “conversion of a U.S. customer to a consignment model in the fourth quarter and significant volume reductions by that same customer.”
New TDMA phone sales to regional carriers and an agreement with NEC for new product sales in China partially offset these sales declines, the company said.
Changes in accounting methods to comply with Financial Accounting Standards Board Statement 142 on Goodwill and Other Intangible Assets, the devaluation of the Mexican peso and the bankruptcy filing of Ntelos Inc., one of its customers, also negatively affected CellStar’s bottom line last quarter, the company said.
