Alvarion posts 2Q loss; CEO to step down

WiMAX vendor Alvarion posted a $4 million net loss for the second quarter and President and CEO Tzvika Friedman announced his intention to step down once a suitable replacement is found.

Shares fell 3.9 percent after the announcement. Excluding amortization, stock compensation expenses and other charges, the company posted a loss of $605,000, or 1 cent a share, compared with income of $1.7 million, or 3 cents per diluted share, the same period a year ago. Sales fell 16 percent to $58.7 million.

Friedman said the company should begin to move toward profitability in the second half of the year.

"We are encouraged by the improvement in order intake in the second quarter as well as by several major strategic customer wins which we expect to translate into hundreds of millions of dollars in future revenues," Friedman said.

Alvarion forecast a third-quarter net loss of 2 to 9 cents. Excluding one-time items it expects a loss of 6 cents per share to a profit of 1 cent a share.

While Alvarion has racked up significant deals recently, including a $100 million deal with Open Range Communications, at least one analyst is stressing the need to get a better indication on the profitability of these contracts. Gilad Alper, analyst with Nessuah Excellence wrote to clients that the firm's concern is "that being large contracts, they are likely to carry lower-than-average profitability, which in Alvarion's case is bad news," he said.

Alper said he expected the company to break even in the third quarter with revenues of $63 million. He maintained a "market perform" rating.

For more:
- see the release
- check out Reuters

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