Shares of Santa Ana-based Powerwave Technologies Inc. plummeted in extended trading Tuesday after the Santa Ana-based company disclosed more setbacks and a considerable revenue and profit drop in its fourth quarter earnings report.
Investors seized upon the rash of continued financial problems outlined in the report and sent shares down more than 25% in afterhours New York trading to a market value of about $50 million.
That followed a 6.5% drop in shares in intraday trading as a string of law firms earlier today announced investigations into possible breaches of fiduciary duty by Powerwave executives and directors.
The company, which makes cellular base station gear for wireless networks, reported revenue of $60.1 million in the recently ended quarter, down more than 65% from a year earlier and missing Wall Street expectations.
Analysts on average had forecast sales of nearly $91 million.
Powerwave posted a loss of $42.6 million in the recently ended quarter, compared to a profit of $6.4 million a year ago.
That included $4.7 million in restructuring charges and related costs of its 1-5 reverse stock split in October−part of a series of moves in the last five months to lower expenses and conserve cash.
Powerwave saw sales drop across its operations.
Revenue in the Americas was $27.6 million in the December quarter, down 57.4% from a year ago. Sales in the Asia Pacific region dropped 70.3% to $17.5 million. Revenue fell in Europe, Africa and Middle East to $15 million, down more than 70% from a year ago.
Powerwave makes antennas, filters and other equipment for cell phone towers.
Its devices capture and boost radio signals between cell phones and base stations inside towers.
Powerwave chief executive Ronald Buschur cited a “significant” slowdown in business from its manufacturing customers−a common refrain made throughout the company’s slide since the third quarter− as well as general economic pressures in its commercial markets and a slowdown in government sales due to the budget impasse in the U.S. that wasn’t resolved until the end of the year, “too late to impact revenue for the quarter.”
The cash-strapped company trimmed operating expenses in the December quarter by $14 million to roughly $12 million, a move that helped increase cash reserves to $70.3 million, up from $46.6 million in the prior quarter.
Powerwave on Tuesday also announced that it plans another round of restructuring for “long-term success” that will be finalized in the coming weeks.
The disappointing fourth-quarter earnings report comes on the heels of several class action lawsuits filed last week alleging Powerwave issued “materially false and misleading statements” regarding its business operations and market opportunities from late October through early February.