Calix shares hit life-low on forecast cut
(Reuters) - Shares of Calix Inc (CALX.N) plunged to their lowest ever, after the telecom equipment maker said it expects second-quarter results to fall well below its earlier forecast, due to a cut in customer spending.
At least four brokerages cut their price targets on the company's stock.
Network gear makers have been facing slowing demand for their products as telecom carrier customers cut spending amid a sluggish U.S. economy and weakness in Europe.
"The revised estimates reflect softness ... due to a slowdown in capital expenditures by service providers increasingly concerned about macroeconomic conditions and uncertainties associated with the implementation of regulatory reforms," Calix said in a statement on Wednesday.
The slow spending is hurting vendors such as Calix, Adtran Inc (ADTN.O) and Acme Packet APKT.O just as they were recovering from the 2008 recession and intense price wars.
Share of Adtran, which on Wednesday said it expects weak quarterly sales, fell as much as 6 percent in early trade on Thursday on the Nasdaq.
Raymond James analyst Simon Leopold, who had expected Calix to be better insulated from the slowdown than Adtran, cut his price target on Calix's shares to $8.50 from $10.
"(We) expect its shares to face material pressure following its negative pre-announcement," Leopold wrote in a note.
Calix shares, which have lost almost three-quarters of their value since their year-high of $22.47 last July, fell 27 percent to their life low of $4.75 in early trade on Thursday on the New York Stock Exchange.
(Reporting By Aurindom Mukherjee in Bangalore; Editing by Maju Samuel, Supriya Kurane)
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