Westell lowers estimate, stock falls

(Telephony) Westell Technologies last week felt tremors from the shakeout in the DSL sector, making downward revisions to its earnings estimates for six quarters. The announcement was greeted harshly by Wall Street, which sent Westell’s stock price plummeting almost 32%.

Though the company focuses on several areas, including conferencing services and telecommunications access products, Mark Zionts, Westell’s CEO indicated a shortfall in the company’s DSL business was one of the main contributors to the revision.

“We have strong faith in the proliferation and penetration of high speed services, but we also recognize it is a challenging time for current and potential deplorers of broadband to predict how many lines they will install in the coming quarters. This makes it diffucult to accurately predict what our demand might be,” he said.

In addition, Zionts said the revision can be attributed to macro-economic factors and DSL service providers exploring provisioning options.

For the fiscal third quarter ending December 31, 2000, Westell pegged total revenues at between $76 million and $78 million.

For the fiscal fourth quarter ending on March 31, Westel predicted revenues to be between $75 million and $80 million. The company also revised its projected revenue for fiscal year 2002, ending March 31, 2002, to between $400 million and $450 million.

These changes, combined with recent fears involving DSL in general, sent Westell’s stock down to $3.063 closing price the day after the announcement.

Though the company took a hit with the announcement, Zionts did not indicate the company would move away from DSL.

“We plan to continue to invest in each of our business units, broaden our product offering [and] expand our customer base,” he said.