Avici Systems Inc. shares tumbled 27 percent Thursday after the communications equipment maker disclosed plans to phase out work on its core router products this year because of increased competition.
Instead, the Billerica, Mass.-based company (Nasdaq: AVCI - News) plans to focus on its new network management software unit, Soapstone Networks. Avici formed the unit just two months ago.
"We recognize that the routing market is under tremendous pressure from alternative technologies such as Ethernet switching,'' said Avici CEO Bill Leighton in a written statement. "We do not believe our focus on core routers and our position as the number three supplier in this market to be a sustainable growth business for the company."
Separately, in a conference call, Avici raised its revenue forecast for 2007 to $50 million to $60 million, about $5 million more than it had earlier predicted, according to Reuters news service.
Avici shares continued to slide in trading early Friday morning on the news.
Published April 20, 2007 by the Boston Business Journal
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment