Ixia down; drop in Cisco business to hurt results | VailDaily.com
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Ixia down; drop in Cisco business to hurt results

NEW YORK – Ixia stock fell Friday after the maker of network-testing equipment warned that fourth-quarter results would miss its forecasts because of a decline in business from Cisco Systems Inc., its largest customer.Shares of Ixia fell $2.93, or 20 percent, to $12.02 in afternoon trading on the Nasdaq Stock Market.”We believe that the risk of Cisco-related business interruptions for Ixia has increased,” JP Morgan analyst Samuel Wilson wrote in a note late Thursday in which he cut his rating on the stock to “market outperform” from “strong buy.”Ixia said the drop in orders from Cisco compared to the previous quarter was greater than $4 million, or about 28 percent.Wilson contends investors should await several quarters of “solid sales results,” to Cisco and perhaps significant growth in business from other customers before aggressively snapping up Ixia shares.Wilson found some reason for optimism, however, noting that bookings that were “solidly” ahead of shipments during the quarter and that bookings to customers other than Cisco were “at record levels.”The Calabasas, Calif.-based company said it now expects fourth-quarter revenue of $37 million to $38 million, rather than $40 million to $44 million as it predicted in October. The results would represent an improvement of 5 percent to 8 percent from the $35.2 million seen in the same quarter a year earlier.Ixia expects earnings before noncash charges will total 8 cents to 9 cents a share, below the 11 cents to 14 cents the company had forecast.JP Morgan makes a market in Ixia shares, and expects to seek or receive compensation from Ixia for investment-banking work within the next three months.Vail, Colorado


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