Short Selling Alert : Sonus Networks, Inc. (SONS). Sonus Networks, Inc. faces Investigation over possible Securities Laws Violations .
Shares of Sonus Networks (NASDAQ: SONS) were down more than 30% Tuesday as of 1:08 p.m. after the company lowered its current-quarter guidance and initiated a cost reduction review.
Sonus states it “no longer expects to receive certain orders … that had been expected to be received at the back end of the first quarter.” As a result, first-quarter revenue is now expected to be $47 million to $50 million, compared to Sonus’ previous guidance for sales of $74 million. In addition, Sonus Networks’ adjusted loss per share is expected to be in the range of $0.29 to $0.34, compared to previous guidance for adjusted earnings of $0.03 per share. Analysts, on average, were modeling earnings of $0.03 per share on sales of $73.7 million.
Worse yet, Sonus’ full-year 2015 revenue will be up to 25% below the midpoint of its previous annual guidance range of $326 million to $330 million. That’s well below Wall Street’s forecasts, which call for 2015 revenue of $324.9 million.
The investigation by a law firm focuses on possible claims on behalf of purchasers of the securities of Sonus Networks, Inc. concerning whether a series of statements by Sonus Networks, regarding its business, its prospects and its operations were materially false and misleading at the time they were made.
On March 24, 2015, Sonus Networks, Inc. announced that it is updating its previous guidance and initiated a company-wide cost reduction review. Sonus Networks, Inc. lowered its previously issued guidance. Sonus Networks, Inc. said that it expects revenue to be in the range of $47 million to $50 million and non-GAAP loss per share in the range of $0.29 to $0.34 for the first quarter ending March 27, 2015 as compared to previous guidance of $74 million in revenue and non-GAAP diluted earnings of $0.03 per share. Sonus Networks, Inc. said that it also expects its revenue for the full year will be up to 25% below the midpoint of its previous annual guidance of $326 million to $330 million.
Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
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