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Envivio revenue warning spooks investors, shares plunge 41 percent
(Reuters) - Video delivery company Envivio Inc (ENVI.O) expects second-quarter revenue to be significantly lower than its earlier forecast on weak spending by telecom carriers in North America and Western Europe.
The company's shares, which started trading at $9.00 in April, plunged 41 percent to $3.38 in extended trade on the revenue warning.
Envivio, which helps telecom operators and cable companies deliver high-quality video to consumers, said it expects revenue to be between $10 million and $11 million, down from its earlier forecast of between $17 million and $18 million.
Analysts were expecting revenue of $17.7 million, according to Thomson Reuters I/B/E/S.
Telecom service providers are delaying or canceling orders on a faltering U.S. recovery and weakness in Europe, hurting vendors including content delivery firms.
"We experienced a slowdown of major project implementations and a lengthening of sales cycles, which we attribute to the current global economic environment," Chief Executive Julien Signes said in a statement.
The company is expected to release its second-quarter financial results on Sept 6 after the market closes.
Shares of the South San Francisco, California-based company, which fell $2.32 to $3.38 in extended trade. They closed at $5.70 on Monday on the Nasdaq.
(Reporting By Aurindom Mukherjee in Bangalore; Editing by Supriya Kurane)
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