While the economic picture appears to be stabilizing, capital spending has
yet to rise along with it, Arris Group Inc. said Tuesday, noting that it expects
to post a third-quarter loss of 7 cents to 12 cents per share.
Arris -- the product of a recent merger between Antec Corp. and Arris
Interactive LLC -- also said revenues for the third quarter will be between $170
million and $180 million, a figure 'somewhat lower' than guidance given July 18
for the stand-alone Antec unit.
'Although business trends in the industry appear to be stabilizing, we have
not seen any upturn in spending so far this quarter,' Arris executive vice
president and chief financial officer Larry Margolis said in a press release.
'This fact, coupled with the reality that inventories [must be] worked through
both at the customer and company level, means we will not see the revenue and
earnings growth that have been typical of prior periods.'
Margolis added that financial guidance beyond the current period is
'inappropriate' as business conditions among the company's domestic and
international remain unsettled. However, Arris added that it might have a
clearer picture during the fourth quarter, when customers provide their
capital-expenditure plans for 2002.
On Monday, UBS Warburg LLC trimmed its 12-month price target for Arris by $3
to $12 per share, noting 'continued uncertainty' in the future ownership of
AT&T Broadband, one of Arris' largest customers.
Arris' shares were down 93 cents, or 11.5 percent, to $7.15 each in early
afternoon trading Tuesday.