NEW YORK -- Blaming the war in Iraq for hurting its broadcasting business, Pinnacle Systems Inc. said Wednesday its fiscal fourth-quarter results would fall below Wall Street's expectations.
The company, which reported third-quarter results Tuesday evening, issued the news in a conference call with analysts and investors.
The Mountain View, Calif., video production company said it lost a penny a share in the third quarter, compared with a 14-cents-a-share loss during the year earlier period. On a pro forma basis, the number tracked by analysts, Pinnacle earned 11 cents a share, meeting Wall Street expectations, but its revenue of almost million easily surpassed analyst expectations of million.
But it's the current quarter which concerned investors the most.
The company said its June quarter will be hurt by project delays as a result of broadcasters consumed with covering the war in Iraq. Consequently, Pinnacle sees fiscal fourth quarter pro forma earnings totaling between nine cents and 11 cents a share, on revenue of the "low-to-mid- million range." Analysts were forecasting pro forma earnings of 13 cents a share on sales of .55 million.
"We believe [the war] will have a short-term impact on our business, said Arthur Chadwick, Pinnacle's chief financial officer, during the company's conference call. "But the impact will limit any sequential increase in the June quarter revenue that would otherwise cover the seasonal decline in consumer sales."
In late-morning trading on the Nasdaq Stock Market shares of Pinnacle were down .35, or 20%, to .55. About 4.2 million shares changed hands, compared with average daily volume of 878,000.
For fiscal 2004, the company is projecting 20% year-over-year sales growth with pro forma operating margins at 10% of sales and a 20% pro forma tax rate.
During the September quarter operating margins will probably be reduced by "a couple of points" due to "normal seasonality" and will boost the margins "a couple of points" in the December quarter.
Source: Yahoo.com
