UTStarcom faces SEC inquiry

UTStarcom today revealed it has received notice from the SEC of a formal inquiry into its past financial quarters’ financial disclosures. The company said in a statement it is cooperating with the inquiry, but otherwise gave no further details. The vendor is expected to reveal more details at a financial conference call after market close today.

UTStarcom, which makes both wireline and wireless telecom gear in Asia and the U.S., also warned that its Q3 revenues would fall short of its previous guidance. On Aug. 2, UTStarcom said revenues would track between $660 million to $680 million. Today it projected Q3 revenues between $620 million and $640 million. President and CEO Hong Lu said that the shortfall owes entirely to uncollected revenues from a single contract: $40 million from Softbank BB for its mVision IPTV network in Japan.

“While we are disappointed that revenues from this contract are being pushed out from the third quarter, this is primarily a timing issue,” Lu said in a statement “UTStarcom has been shipping mVision to Softbank BB since early 2005, and we are pleased with the performance of our product to date. Softbank BB launched its commercial IPTV network in July of this year, and we are currently in discussions with them for two mVision expansion contracts.”

Shares in UTStarcom were down 25% in early trading today.