Most technology stocks are being dragged down again today after the news that computer networking shop Foundry Networks, Inc. (NASDAQ: FDRY) slashed its earnings outlook, blaming the weak U.S. economy. The news came on the same day that General Electric Company (NYSE: GE) announced a surprising profit warning, sending the market down.The data equipment maker announced it now expects earnings from the first quarter between $13 million and $14 million, or 8 cents to 9 cents a share, including stock-based compensation. The company cited the slumping credit crisis and challenging market conditions which cause some of its customers to delay orders. Analysts, on average, expected the company show higher first-quarter earnings of 17 cents a share, according to FactSet Research.
Foundry Networks also projected a quarterly revenue in a range between $148 million and $150 million, compared with $135.8 million reported in the same period a year ago. The company's estimates were below analysts' predictions for revenue of $163.4 million in the quarter.
In the first quarter, business was more challenging because the "macroeconomic environment evolved from the financial market crises which we believe led some customers to delay their purchase decisions," Foundry's chief executive Bobby Johnson stated.
Eliza Popescu is a financial writer for the online investment advisory service Investor's Observer.
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Reader Comments (Page 1 of 1)
4-15-2008 @ 1:31PM
CJ said...
The entire networking industry is facing a slow-down as companies are curtailing spending where they can. Unfortunately for manufacturers like Foundry, IT departments are usually one of the first areas this happens. CIOs are being forced to get more out of less. This often means delaying new projects or selling off surplus gear to meet their budgets. This is good news for the secondary market, bad news for investors.
Jason
http://www.townsendnetworks.com