Ixia has yet to regain its footing after the ousting of top executives last year, and the company announced a restructuring that includes cutting up to 6% of its workforce. The company expects the cuts to be completed by the end of September, and will be eliminating open replacement positions as well as new hires it had planned to make, while reducing costs in other discretionary areas.
Ixia reported preliminary financial results for the first quarter of 2014 that included a net loss of $18 million, compared to profits of $7.8 million in the year-ago period. Revenues were expected to be around $114 million, higher than the company’s previous estimate of up to $113 million, but less than the $121 million reported during 2013’s first quarter.
Ixia’s first quarter results include about $11 million in revenue from its acquisition of Net Optics, which it purchased in December 2013.
“Our first quarter revenue was impacted by lower than expected Network Visibility Solutions bookings due to the sales integration activities related to our Net Optics acquisition and lower spending from our key service provider customers in North America, continued challenging market trends in some segments of the test market, and a larger than expected mix of warranty and Application Threat Intelligence subscription bookings as part of our total bookings,” said Errol Ginsberg, Ixia’s chairman and acting CEO.
Analyst Brian Modoff of Deustche Bank said in a research note that while it is a challenging time for the company, its demand from enterprise and its Wi-Fi offerings appear to be strong points.
“It appears that [wireless local area network] vendors are purchasing Ixia’s test equipment to measure 802.11AC performance, a trend that could continue as we move forward to wave two of 802.11ac,” Modoff wrote.
Ixia expects to report second quarter results by Sept. 12, which is the most recent extension deadline given to it by Nasdaq in order to meet listing requirements. Ixia has been behind on its earnings reports since taking time for a financial audit when it discovered that its former CEO had falsified some of his credentials. No deliberate wrong-doing was found, but the company’s CFO resigned and Ixia has had to re-state two quarters of earnings and change some of its reporting processes.
Ixia said it expects second quarter revenues between $109 million and $113 million and a net loss per share of between 16 cents and 20 cents. The second quarter saw reduced orders from Ixia’s service provider customers for its network visibility products and mobility infrastructure offerings, according to the company, as well as lower orders from network equipment manufacturers and challenging market conditions in the test markets for routing and switching.
