Duluth, Ga. -- Lower margins due to higher
research-and-development and manufacturing costs, a late-year volume drop in
infrastructure products and a one-time restructuring charge are among the factors expected
to drive down Antec Corp.'s earnings in the fourth quarter.
Antec president and CEO Bob Stanzione said in a prepared
statement last Wednesday that although revenue and earnings for the year should exceed
1998 levels, fourth-quarter earnings could be 10 cents to 15 cents per share below
analysts' consensus estimates of 30 cents per share.
Antec stock was hammered as a result of the announcement,
falling more than 21 percent, or $8.14 per share, to $29.80 last Wednesday afternoon.
The company said it is taking measures to reverse the slide
in gross margins, and it will incur a $16 million restructuring charge for organizational
changes and discontinued product lines.
Adding to the gross-margin shortfall was an unexpected
shift by AT&T Corp. toward ordering less expensive "Voice Port" equipment
and software and away from the higher-margin "Host Digital Terminal" equipment.
Although the company said the shift indicates an impending
ramp-up of cable-telephony services, the move toward the less expensive equipment had a
negative impact on HDT revenue for the quarter.