Mellanox cuts 4th-quarter revenue estimate, shares fall

Wed Jan 2, 2013 6:05pm EST

(Reuters) - Chip designer Mellanox Technologies MLNX.TA (MLNX.O) cut its fourth-quarter revenue estimate sharply as a cabling issue delayed deployments of its InfiniBand products, sending its shares down 16 percent.

The company lowered its revenue estimate for the quarter ended December to between $119 million and $121 million from its earlier forecast of $145 million to $150 million.

A technical issue with its FDR InfiniBand cabling delayed about $20 million of deployments during the quarter.

Maxim Group analyst Ashok Kumar said some of the company's products have not met the expected specifications which has led to customers cutting orders, adding to the woes of a cooling data center market.

The company's InfiniBand products allow databases, servers and computers to talk with one another.

The cabling issue has been resolved and is not expected to impact revenue in the future, the company said.

"It is not a showstopper but a near-term issue which they will fix," Kumar added.

Mellanox will report results on January 23.

The company's stock was down at $50.0 in extended trade, after closing at $61.19 on the Nasdaq on Wednesday.

Its shares have lost nearly 42 percent of their value in the last three months. The stock fell in October when Mellanox forecast disappointing numbers for the fourth quarter.

(Reporting by Neha Alawadhi and Aurindom Mukherjee in Bangalore; Editing by Sreejiraj Eluvangal)

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