SafeNet (Nasdaq: SFNT) lost more than half its value in morning trading Thursday, falling US$18.25 to $15.13 afterwarning of a shortfall in first-quarter results.
The company, which makes technology designed at enabling securecommunications over the Internet, said it expects net income of 3 to 6 centsper share for the quarter ending March 31st, far below the 22 cents expectedby analysts.
“Under these changing economic conditions, we are adjusting our businessplans to ensure a continued string of profitable quarters,” said chairman andchief executive officer Anthony A. Caputo.
Revenue will total about $6 million, also far below previousexpectations, because of order cancellations and “reduced expectations” fororders from networking customers, SafeNet said.
SafeNet said it plans to report results on April 17th.
The company also said that despite the economic slowdown, it is achieving”significant progress” toward its goal of “widespread deployment” of itsSecureIP technology. SafeNet said it introduced two new products lastquarter that were licensed by several manufacturers, including a “majorsemiconductor company.” The new products are aimed at the broadband andwireless markets.
“These licenses generate a combination of initial fees and recurringrevenue,” SafeNet said.
In January, SafeNet reported net income of $2.7 million, or 36 cents per share, for thefourth quarter ended December 31st, compared with a loss of $643,000, or 11 cents,in the 1999 fourth quarter.
Revenue surged 98 percent to $8.9 million. The companyattributed the improvement to strong demand for sales of its Virtual PrivateNetwork products and a shift to higher-margin software and license products.
SafeNet, which in November changed its name from Information ResourceEngineering, counts among its customers Cisco Systems, Intel, Nokia and3Com.