Extreme Networks cuts Q2 outlook, plots restructuring

Summary:Extreme Networks said it will restructure following a weaker-than-expected second quarter.

extreme
Customers in EMEA and the U.S. delayed purchase of Extreme gear.

 

Extreme Networks said it will restructure its operations since its second quarter results will fall short of expectations. The networking company said that customers in Europe, Middle East and Africa as well as the U.S. delayed purchase.

In a statement, the company said it will report second quarter sales of $75 million to $77 million. That target was below Extreme's lower end guidance of $78 million. Wall Street was looking for $82 million.

The company also said that its margins will be 54 percent to 55 percent in the second quarter. Wall Street was looking for 55 percent.

As for earnings, Extreme said it will report a second quarter loss of 4 cents a share to 7 cents a share. Non-GAAP earnings will be 2 cents a share to 3 cents a share. Wall Street was looking for non-GAAP earnings of 6 cents a share.

Details about Extreme's restructuring plan weren't outlined completely. The company said it will take a charge of $5.5 million to $7 million in the second quarter and aim to save $7 million a quarter. Actual job cuts weren't given.

The December quarter may have been rocky for many tech companies. Extreme may be kicking off the tech earnings confessional period. 

Topics: Networking, Data Centers

About

Larry Dignan is Editor in Chief of ZDNet and SmartPlanet as well as Editorial Director of ZDNet's sister site TechRepublic. He was most recently Executive Editor of News and Blogs at ZDNet. Prior to that he was executive news editor at eWeek and news editor at Baseline. He also served as the East Coast news editor and finance editor at CN... Full Bio

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