DragonWave stock recovered almost all of its losses to end last week after a lot of activity was seen for the company on the Canada’s Toronto Stock Exchange. Early Thursday morning, DragonWave Inc. share prices took a 12.6 per cent drop on negative news about the company. The Ottawa-based firm had released a statement that mentioned that the company’s third-quarter revenues would be lower than expected. After the roller coaster ride the share price of DragonWave ended up being $2.16 a share which is an overall 2.3 per cent decline from a day before. DragonWave is known for its microwave radio system equipment which runs “voice and data wirelessly between cell towers and providers’ networks” and reports its financials in U.S. dollars.
DragonWave estimated $39 million in revenue for the third quarter of fiscal year 2012 which closed on November 30. The amount is a lot lower than estimates and in the previous ranges given the new projections are nine per cent lower than what the company had expected using pessimistic variables. Previously the company’s analysts and management had expected revenues to be around $43 million to $50 million.
The Canadian firm who is a “Designer and provider of high capacity broadband wireless networking systems for network operations and service providers” sent out a press release that blamed the lower revenues on short-term supply challenges for the month of November. This had an effect on shipping dates and the firm had to reschedule orders to December. Ongoing economic issues in Europe also led to lower than expected orders from customers on that continent. The press release was also quite clear about the fact that external auditors and not yet reviewed the expectations and that these were only preliminary projections.
The bad news comes after DragonWave recently acquired of a part of Nokia Siemens Networks in Shanghai. DragonWave’s stock currently sits at $2.24 (DWI).
Source: Ottawa Business Journal
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