Synchronoss sees slow demand from AT&T, shares fall
(Reuters) - Synchronoss Technologies Inc's (SNCR.O) shares slid 18 percent in extended trade on Monday after the phone billing software maker flagged slowing demand from its largest customer AT&T (T.N).
The slowdown in revenue from the No. 2 U.S. carrier eclipsed the company's better-than-expected first-quarter profit, which was largely boosted by demand for its cloud-based mobile services from Verizon Wireless.
AT&T contributed about 50 percent to the company's revenue in the first quarter.
Rival customer service and billing software maker Amdocs Ltd DOX.N cut its full-year revenue growth forecast last week, citing a slow recovery in capital spending at AT&T.
AT&T's subscriber growth has been weakening as it tempers upgrades for Apple Inc's (AAPL.O) iPhones after it was hurt by hefty subsidies it had to pay the smartphone maker.
Synchronoss, whose software is used by communications service providers to manage customer orders and transactions, said it expects revenue from AT&T to grow in a range of 5 percent to 10 percent, lower than its initial double-digit growth expectation.
For the full year, Synchronoss, which also competes with CSG International Inc (CSGS.O) and NeuStar Inc (NSR.N), expects adjusted earnings of $1.07 to $1.11.
Analysts were looking for earnings of $1.10 according to Thomson Reuters I/B/E/S.
Net income applicable to common shareholders rose to $5.5 million, or 14 cents per share, from $139,000, or 4 cents per share, a year earlier.
"With both Verizon and Vodafone subscribers as anchor clients, we feel we are well-positioned to drive our expanded roadmap over the coming years," Chief Executive Stephen Waldis said in a statement.
Excluding items, the company earned 26 cents per share, while revenue rose 22 percent to $64.9 million.
Verizon contributed over 10 percent to the company's revenue.
Analysts on average had expected a profit of 25 cents per share on revenue of $64.2 million.
The company's shares, which closed at $28.34 on Monday on the Nasdaq, were down $4.84 at $23.50 in after-market trading.
(Reporting by Chandni Doulatramani in Bangalore; Editing by Don Sebastian, Saumyadeb Chakrabarty)
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