Carrier Access cuts costs as revenues dwindle

Carrier Access is restructuring some operations to cut costs this year after another disappointing quarter.

The equipment vendor expects to report between $8.3 million and $8.7 million in first-quarter revenue, it said this week. That represents a sequential decline of about a third and a more than 60% drop from a year earlier. The company also expects to report a net loss between $0.27 and $0.32 per share.

In a statement released by Carrier Access this week, chief executive officer Roger Koenig repeated that the company continues to have limited visibility into the plans of its wireless carrier customers, which are currently mulling strategies to optimize 2G and 3G networks. “Unfortunately, our revenue from wireless carriers did not recover in the first quarter, as this planning mode continued,” he said.

Though revenue from wireless customers was down sequentially from an already disappointing fourth quarter, Carrier Access “continued to spend significantly” on research and development (R&D) in the first quarter, in anticipation of a wireless spending rebound, it said. The company also acquired access equipment vendor Mangrove Systems for $8 million in cash during the quarter, a move it expects to help it grow its business in overseas markets.

To reduce R&D costs in the second half of this year, Carrier Access is “down-sizing” some of its remote development centers and eliminating some contractors. The company plans to record a restructuring charge in the second quarter between $500,000 and $1 million to make these changes.

The first quarter is only the latest disappointing one for Carrier Access. The company warned of “softness” in its fourth quarter results. Before that, it reported a 23% year-over-year drop in third-quarter revenue, calling the results disappointing but not indicative of any long-term trend.

The company is also working to diversify its customer base. One customer contributed 36% of its revenue last year.