Sonic Solutions down; cut views sharply below Street | VailDaily.com
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Sonic Solutions down; cut views sharply below Street

NEW YORK – The stock of Sonic Solutions, which makes software for recording DVDs, fell Wednesday after it sharply lowered it earnings forecasts because of delays in the launch of the next generation of video discs, and declining revenue from its largest customer, Dell Inc.Shares of the Novato, Calif., company fell $1.89, or 11 percent, to close at $15.62 Wednesday on the Nasdaq Stock Market.Late Tuesday, Sonic projected earnings between 25 cents and 30 cents per share for the current quarter, well below Wall Street’s estimate of 43 cents a share. It sees revenue between $37 million and $40 million, below analysts’ mean estimate of $44.7 million.For the next quarter, the fiscal fourth, Sonic expects to earn 28 cents to 38 cents a share, on revenue of $38 million to $42 million, below analysts’ estimates of 54 cents a share in earnings on revenue of $48.8 million.Chief Executive Dave Habiger said on a conference call that revenue from Dell would decline by roughly $5 million during the third and fourth quarters.”After this reset, we do expect our business with Dell to continue to grow, partially as a function of Dell’s growth, but because we expect to launch new business opportunities with Dell, some perhaps as soon as the March quarter,” Habiger said according to a transcript provided by Thomson StreetEvents.J.P. Morgan analyst Sameer Doctor, who downgraded Sonic to “neutral” from “overweight,” said investors could find superior returns elsewhere.J.P. Morgan is a market maker of Sonic, and also received compensation from Sonic for investment banking services.Vail, Colorado


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