Digi International Inc, the US vendor of connectivity hardware and software for computer networks, PC’s and peripheral devices, warned Thursday that its financial results for the current quarter to December 31 would fall below year-ago levels, citing customer order delays sparked by Y2K bug fears.
The Minneapolis-based company said it expected earnings for its fiscal 2000 first quarter to come in at between $0.03 and $0.07 a share. Revenue will be in the $39m to $41m range. The diminished earnings expectations are dwarfed by the $0.19 a share which analysts had, on average, been looking for from the firm, according to First Call. Meanwhile the downgraded revenue projections come in at least 25% below the $51.4m recorded for the corresponding period last year.
We believe the slowdown in the company’s first fiscal quarter to be uniquely associated with the well-documented Y2K lockdown and we are optimistic about our order flow for next quarter, said Joseph Dunsmore, Digi’s newly-elected president and chief executive officer in a statement. The company said original equipment manufacturers were deferring orders through the millennium date change but that it expected to recoup a significant proportion of what would have been this quarter’s revenue in its second and third quarters.
In recent months we have decreased our distributor sales channel inventory to the lowest dollar levels for the past two years, added Dunsmore. We believe this has positioned us for a positive fiscal second quarter.
