Novatel Wireless posts 3Q profit on strong MiFi sales, but revenue outlook to fall short

Thursday, October 29, 2009

Novatel Wireless posts 3Q profit on higher revenue

SAN DIEGO — Novatel Wireless Inc. posted a third-quarter profit, reversing last year’s loss, as strong sales of its MiFi personal Wi-Fi hotspot device took off. But a weak outlook for fourth-quarter sales sent shares tumbling nearly 18 percent in after-hours trading.

The provider of wireless high-speed Internet service reported net income of $6.2 million, or 20 cents per share, compared with a loss of $1 million, or 3 cents, in the same quarter a year ago. This year’s third quarter was buoyed by a 4-cent per share tax benefit.

Revenue rose by 20 percent to $94.3 million.

The results topped expectations of analysts surveyed by Thomson Reuters, who expected revenue of $92.6 million and profit of 10 cents per share including stock-based compensation costs.

However, the company said it expects fourth-quarter MiFi sales to be similar to third-quarter levels as sales catch up to initial stocking orders. That means fourth quarter revenue will range between $85 million and $95 million — below the $95.7 million expected by analysts.

Earnings should range from 4 to 12 cents per share, Novatel said. The midpoint of 8 cents per share also is below analysts’ 10-cent-per-share average forecast.

Shares of Novatel, based in San Diego, fell $2.15, or 17.6 percent, to $10.01 in after-hours trading. The stock was up 22 cents to close the regular session at $12.19 on Thursday.

will not be displayed