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Envivio revenue warning spooks investors, shares plunge 41 percent
August 13, 2012 / 9:46 PM / 5 years ago

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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