Beleaguered metro router maker Riverstone Networks today said first quarter sales for fiscal 2004 would be lower than analyst expectations.
The company, which is under SEC scrutiny for its accounting practices, said revenue for the period ended May 31 would be US$12 million to US$13 million, not the US$16 million expected by analysts queried by Thomson First Call. Riverstone said it would also incur a loss of US$.15 to US$.17 per share, which is in line with analyst expectations.
Riverstone is scheduled to report its first quarter results on June 19.
The company is blaming weak sales in Asia, particularly China, "due in part to regional disruption of business activity," Riverstone stated, and flat sales in North America. Meanwhile, the company experienced increased sales in Europe, the Middle East and Africa.
Riverstone said it was also successful in reducing the cost of operations during the first quarter, decreasing its net loss to a projected range of $18.6 million to US$20.7 million, vs. US$40.6 million in the fourth quarter of fiscal 2003. Total headcount of 368 at the end of the first quarter is below the previously announced target of 380, and the company said it continues to focus on a range of cost reductions in order to accelerate its return to profitability.
In April, the SEC requested information on the company's accounting practices as a possible prelude to a formal investigation. Riverstone said it is cooperating with the SEC's request.
Riverstone is also hunting for a new CEO after chairman Piyush Patel relinquished his role to Romulus Pereira, who is now chairman and acting CEO. Riverstone said the move was made so Pereira could focus on strategic direction rather than day-to-day operations.
Riverstone has been looking to broaden its addressable markets after posting consecutive quarterly losses from sales to service providers who have sharply curtailed capital spending over the past two to three years. The company is now targeting enterprises, cable companies and the federal government, among other opportunities.