Catapult shares drop on forecase of revenue shortfall | VailDaily.com
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Catapult shares drop on forecase of revenue shortfall

NEW YORK – Catapult Communications Corp. shares fell Tuesday, after the company forecast a shortfall in its fiscal second-quarter revenue.The Mountain View, Calif.-based company, which makes testing equipment for telecommunications equipment makers, said $6 million in orders couldn’t be recognized because of engineering delays. The company cut its revenue forecast to $10.5 million, from $14 million.Shares of Catapult fell $1.30, or 9.9 percent, to $11.80 in afternoon trading on the Nasdaq Stock Market. Tuesday’s weakest level of $11.73 was a 52-week low surpassing the prior low of $11.75 set Feb. 1.There was a 52-week high of $21.39 last April 4.Most of the engineering delays will be resolved in the fourth quarter ending Sept. 30, the company said late Monday.Catapult made a similar announcement prior to posting fiscal first-quarter results, citing engineering delays that hurt revenue for that period by $2.5 million. At the time, Catapult said the difficulty would continue at least through the second quarter.The company has seen continued delays in completing a new hardware platform which turned out to be a more difficult project than expected.The work diverted company engineers from new product development, resulting in missed opportunities that have opened the door for new competition.”The bear case for the stock is they need to invest in more head-count for engineering,” said Canaccord Adams analyst Joanna M. Makris. “This is not a one-time event.”Makris speculated that lacking growth, Catapult, with $4.77 a share in cash on its books, may seek to make an acquisition that could dilute earnings.Makris, who maintains a “hold” rating on Catapult, disclosed no conflicts of interest in her research.Vail, Colorado


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