Ceragon Networks Ltd. (Nasdaq: CRNT; TASE:CRNT) will not remember 2012 as a one of its good years. The wireless backhaul solutions developer saw its share price fall 42.7%, and it fired a tenth of its workforce. The company also ended the year on a dissonant note, announcing that it learned in late December that a large customer requires additional acceptance procedures and documentation for equipment purchased. Ceragon estimates that the delay will postpone recognition of $11-14 million revenue from 2012 to 2013.
Ceragon adds that the equipment was installed and accepted previously by the customer pursuant to the process in place at the time.
In its previous guidance, Ceragon said that the fourth quarter of 2012 would be weak, due to the global macroeconomic situation. It estimated its full-year revenue at $459-465 million, 3-4.4% growth over 2012.
Ceragon did not disclose the name of the customer, nor did it say whether the revenue would be recognized in the first quarter of 2013 or in subsequent quarters. It cannot be ruled out that part of the revenue from this customer will not be recognized in 2013 at all, and that recognition will be delayed until 2014.
Ceragon said it has been working with the customer for five years on various projects around the world, and that the new requirements took it by surprise. Ceragon president and CEO Ira Palti said, "Learning of this requirement in the last days of the fiscal year meant we had no time to respond to the additional requirements."
Ceragon also said that collections from customers were strong during the fourth quarter, boosting its net cash by $12-13 million.
The company had $48.6 million in cash at the end of September. The company will publish its financial report for the fourth quarter and full year of 2012 on February 14.
Ceragon's share price fell 4.6% by mid-afternoon on the TASE today to NIS 16.94, after falling 1.7% on Nasdaq on Friday to $4.62, giving a market cap of $169 million.
Published by Globes [online], Israel business news - www.globes-online.com - on January 6, 2013
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