Aruba warns fiscal 2Q below expectations

Enterprise WLAN vendor Aruba announced its second-quarter fiscal results ended January would not meet Wall Street's expectations, blaming a delay in approval of the federal budget.

The company expects revenue for the quarter of between $40 million and $41 million with a loss of about 4 cents to 5 cents per share. Wall Street had expected revenue of $51.5 million and a profit of 5 cents a share.

In a press release, Aruba CEO Dominic Orr said the company in the quarter "experienced a significant decrease in revenues in the federal vertical in conjunction with the delay in the approval of the Federal budget." He expects the federal business to pick up in the second half of the fiscal year.

Orr also said that the company has seen "an elongated sales cycle" at some customers. He also said that a transition to a two-tier distribution system has taken longer than expected.

Goldman Sachs noted in a research note that the economic slowdown is weighing on Aruba's business. "In addition to U.S. weakness, the company is also seeing weakness in Europe, particularly northern countries such as the U.K.," the firm wrote. "While U.S. enterprise weakness is not a major surprise, weakness in European enterprise suggests that macro issues could weigh on the company longer than originally expected."

For more about Aruba's lower-than-expected results:
- take a look at this article from AP
-
read this release

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