October 8, 2019

Sandvine reports Q2 loss announces new orders

WATERLOO, Ont. — Network technology company Sandvine Corp. (TSX:SVC) reported a US$4.2-million loss in its second quarter but that was tempered by the announcement of new orders from a top U.S. telecom company.The loss, reported in U.S. currency, amounted to three cents per share.Based in Waterloo, Ont., Sandvine had US$18.6-million in revenue for the three-month period. That was at the high end of a range of US$18-million to US$18.5-million estimate issued in a June 7 warning to investors.Prior to the warning, analysts had been expecting Sandvine to generate about $22 million of revenue for the second quarter.[np-related]Sandvine said last month that the revenue shortfall was due to delays in negotiating a contract with Spain’s Telefonica.On Friday, shortly after the earnings announcement, the company announced that it has received more than $2-million in orders from one of the top 10 telecom providers in the United States, though it didn’t identify the customer.Telecom companies use Sandvine’s technology to manage the traffic flow on their communications networks. The company had been on a growth curve as carriers adapted to their customers’ increased demand for Internet-based communications.However, signs of an economic slowdown in Europe and Asia and slow growth in North America have made many companies more cautious about spending on capital projects.Sandvine’s revenue for the three months ended May 31 was down 24 per cent from $24.5-million in the second quarter of 2011. The year-earlier profit was $1.7-million, or 1.2 cents per share.“Our second-quarter revenue was consistent with the estimate that we provided in June,” Dave Caputo, Sandvine’s president and CEO, said in a statement.“We continue to believe that we will soon be able to win some initial business related to opportunities with Tier 1 operators, globally, and conclude a global supply arrangement for a major multinational operator customer.”In the contract announcement, Sandvine chief operating officer Tom Donelly said the U.S. telecom provider is “committed to delivering a consistently high quality user experience across the full range of their products and services.”The order included purchases of traffic management products for digital land lines used by telecom companies to provide high-speed Internet services to their residential customers.