Extreme Networks Plunge 22% As Q1 Outlook Slashed

(RTTNews) - Shares of Extreme Networks, Inc. (EXTR) plunged more than 22 percent in extended trading on Wednesday after the provider of high performance network solutions slashed its earnings and revenue guidance for the first quarter of fiscal 2015.

The company is scheduled to report financial results for the first quarter of fiscal 2015 on October 28.

"Extreme faced a number of headwinds that affected our revenue this quarter. Our EMEA business was impacted by the weakening of the Euro and the political and economic conditions in the Eastern part of these markets. In North America, we experienced significant delays in closing deals," President and CEO Charles Berger said in a statement.

The San Jose, California-based company now expects adjusted results to range between a loss of 0.02 and breakeven per share for the first quarter, down from the prior adjusted earnings projection in the range $0.06 to $0.08 per share.

On average, six analysts polled by Thomson Reuters currently expect the company to report earnings of $0.07 per share for the quarter. Analysts' estimates typically exclude one-time items.

The company also said it now expects reported net loss for the quarter in the range of $0.21 to $0.19 per share, compared to its previous guidance of a net loss in the range of $0.12 to $0.08 per share.

Further, the company slashed quarterly adjusted revenue guidance to now be between $135.0 million and $136.5 million from the previous forecast between $150 million and $155 million. Street is currently looking for revenues of $152.26 million for the first quarter.

Reported revenues are now projected between $134.0 million and $135.5 million, down from the earlier forecast between $149 million and $154 million.

Additionally, the company noted that it is on track to realize the full $30 million to $40 million in cost synergies expected from the acquisition of Enterasys.

"Lenovo also closed the acquisition of the IBM X86 server business. The combination of strong sales leadership, nearly completed integration and the finalization of the Lenovo acquisition position us well for the remainder of our fiscal year," Berger added.

EXTR closed Wednesday's regular trading session at $3.76, up $0.15 or 4.16% on a volume of 2.11 million shares. However, the stock plunged $0.84 or 22.34% in after-hours trading.