Investors apathetic about NPI's earnings forecast

Network Peripherals Inc. is the latest technology company to forecast lower-than-expected third-quarter revenue. But unlike Ascend Communications Inc. or Western Digital Corp., its stock price has yet to incur investors' wrath.

On Thursday, company officials announced the networking firm would initiate a restructuring program to soften the blow of poor sales. In the third quarter, NPI expects to report a loss of about $0.95 per share, including a $0.50 per share restructuring charge. Zacks Investment Services had anticipated that NPI would report a loss of $0.16 per share before charges.

But after making this bleak proclamation, NPI's stock didn't collapse like so many others in the same predicament. It closed down slightly, by $0.06 a share to $5.57, on Friday.

"Well the stock has just been beat to hell anyway," said Joel Achramowicz, an analyst at Dakin Securities. "NPI probably still has about $2 per share in cash, so most of the investors are probably just holding on and hoping for things to improve."

NPI is trading near its 52-week low of $4.50 and far away from its 52-week high of $21.25.

Last quarter, NPI reported $10 million in revenues while posting a loss of $8 million, or $0.68 per share.

The Milpitas, Calif.-based firm plans to layoff about 100 employees and use the distribution channels of other companies for its FDDI and Fast Ethernet products.

"We'll go toward OEM deals in the future, and we're not going to spend as much money trying to work distribution because it takes a lot of money to build a brand name in the channel," said Robert Hersh, NPI's chief financial officer.

Company officials added that another $4.5 million will be written off in the third quarter to cover the costs of adjusting excess inventories of both Fast Ethernet and FDDI products.