UPDATE 2-Synchronoss has weak forecast related to iPhone
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SAN FRANCISCO, May 6 (Reuters) - Communications software maker Synchronoss Technologies Inc SNCR.O on Tuesday gave a weak current-quarter forecast and reported lower-than-expected results, due in part to declining revenue associated with Apple Inc's <AAPL.O iPhone.
Synchronoss shares tumbled 45 percent in extended trading after it issued the tepid quarterly results and forecast.
Synchronoss gets paid for every iPhone activated with a carrier that provides service for the device. So far, AT&T Corp (T.N) is the only official U.S. service provider for the popular smartphone, a next-generation version of which is expected early this summer.
Over the last several months, analysts have expressed concern about the practice of "unlocking" iPhones to run on networks other than AT&T's. On Apple's most recent conference call to discuss its quarterly results, on April 23, Chief Operating Officer Tim Cook said Apple was seeing a "significant" number of unlocked iPhones.
"The gap between the number of iPhones expected to be sold and the actual number that we are activating continues to be significant, and we expect this trend to continue," Synchronoss Chief Executive Stephen Waldis said on a conference call to discuss his company's results.
Waldis noted Synchronoss does not get paid when iPhones are sold, then "unlocked," and subsequently activated with another cellular service provider.
On the conference call, the company forecast earnings of 10 cents to 11 cents a share, excluding items, on revenue of $24 million to $25 million for the second quarter.
Analysts, on average, were expecting earnings of 19 cents a share, before special items, on revenue of $35.2 million, according to Reuters Estimates.
In the first quarter, the company earned $4.3 million, or 13 cents a share, compared with $3.7 million, or 11 cents a share, last year. Revenue rose 36 percent to $29.1 million.
Analysts, on average, had expected the company to earn 16 cents a share on revenue of $31.2 million.
Business related to AT&T was about $21 million in the quarter, representing 72 percent of its total revenue.
Synchronoss shares fell $10.40 to $12.50 in after-hours trading. They closed at $22.90 on Tuesday on Nasdaq. (Reporting by Duncan Martell, with additional reporting by Supantha Mukherjee in Bangalore; Editing by Himani Sarkar and Braden Reddall)
