Allot Communications released a severe profit warning that sent its share price tumbling on Monday’s Tel Aviv Stock exchange. The share price for the company is nearly 12% off in Tel Aviv.
The company that specializes in broadband solutions said that on its preliminary estimates show that revenue during its 2015 second quarter will be between $21 million and $22 million.
This is significantly less that the average estimate by analysts of $30.4 million and represents a drop of between 25% and 29% compared to the same quarter last year. It is also between 29% and 32% less than the previous three-month period.
In fact, an organic basis, the drop is sharper, since earlier this year. Allot acquired Optenet the Spanish data security business, which was projected to add millions of dollars to annual revenue.
The drop in revenue is to affect the profitability of the company. Allot said it expects a net operating loss will be generated during the quarter.
On a positive side, the Allot book to bill ratio for the second quarter was over 1 and its cash reserves on June 30 were $120 million, which was slightly lower than the end of the first quarter of this year, and half of the market cap of the company.
The Allot President and CEO Andrei Elefant said the company had been disappointed with the preliminary results of the first quarter and the delays during the closing of certain pending deals during the second three months of the year.
Booking rebounded during the second quarter and included three totaling more than $8 million from mobile operators that are Tier-1. It is expected that initial revenue recognition from the runs during the 2015 second half.
Allot announced on Monday that it won contracts that it called strategic that were worth more than $8 million.
