Relocation and Fewer Orders Play Role in Powerwave Loss

Powerwave Technologies Inc., which lost production output while relocating a factory in Orange County, warned Tuesday that it expects to record a loss for its fiscal first quarter on much lower revenue.

The Irvine company disclosed the gloomy outlook shortly after the close of regular trading in U.S. markets. The stock tumbled as much as 22%, falling as low as $11 a share in after-hours Nasdaq trading. The stock had fallen $1.25 a share to $14.19 in regular hours.

Analysts had been predicting earnings of 6 cents a share and revenue of $115 million for the three months ending April 1, according to a survey by First Call/Thomson Financial. Powerwave said, however, that it expects revenue of only $70 million to $80 million.

Powerwave Technologies, which makes components for wireless-telephone networks, said the relocation of its manufacturing operations to a new facility in Santa Ana resulted in first-quarter production halts while individual product lines were moved.

Production capability for the first quarter is expected to be at the lower end of the company’s previously estimated range of $105 million.

The company also said makers of wireless-telephone equipment have reduced and delayed orders for some products, a reflection of weakness in the wireless communications sector and an overall economic slowdown.

Separately, Powerwave announced supply agreements with Motorola Inc. and Lucent Technologies Inc. Financial terms of the deals weren’t disclosed.

Powerwave will be the exclusive supplier of multi-carrier amplifiers for certain Motorola cellular base stations.

Initial product deliveries are expected to begin in the first half of 2001.

The three-year agreement with Lucent calls for Powerwave to provide the amplifiers for Lucent’s wireless network.

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Swamped

Powerwave Technologies shares have been battered this year, losing more than two-thirds of their value. Daily closing prices:

Tuesday’s close: $14.19

Source: Bloomberg News