Ceragon Networks Ltd. (Nasdaq: CRNT; TASE:CRNT) has published a profit warning for the first quarter of 2014. This is the company's third profit warning, following warnings for the first quarter of 2013 and the fourth quarter of 2012. This time, however, it has sweetened the bitter pill with the announcement of a $17 million legal settlement, which will be reported in the second quarter.
Ceragon cut it first quarter guidance to $70-73 million from $83-93 million. The new guidance is 19-22% below revenue for the corresponding quarter of 2013. It attributes the lower guidance to its decision not to ship and install equipment for a certain customer until completing the renegotiation of payment terms. A secondary factor was a higher than expected proportion of IP-20 products in first quarte bookings, because some orders were received too late in the quarter to ship within the quarter because manufacturing for the new products had not reached full productivity.
"Our revised revenue expectations for the first quarter are unrelated to demand, which is improving," said Ceragon president and CEO Ira Palti. "Bookings increased over 25% sequentially in the first quarter, to a level above the high end of our original revenue guidance. Thus, our book-to-bill ratio improved significantly, even though the first quarter is typically a seasonally weaker quarter for bookings."
In a separate development, Ceragon has settled its legal dispute with Norway's Eltek ASA (OSL: ELT) relating to Ceragon's acquisition of Nera Networks from Eltek in January 2011.
Published by Globes [online], Israel business news - www.globes-online.com - on April 2, 2014
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