Petaluma networking equipment maker Calix reported disappointing second-quarter earnings Tuesday and warned investors that business will not bounce back quickly.
Revenues fell to $78.9 million during the quarter ending June 30, down 19.4 percent from the same time last year, when Calix reported $98 million in revenue.
"We saw weakness across nearly all parts of our customer base in Q2," Calix CEO Carl Russo said in a conference call with investors. "As you are aware from reports by other companies in our industry, macro-economic concerns have had the effect of slowing down capital projects."
Customers also had concerns about regulatory reforms and were increasingly reluctant to accept stimulus funds for broadband projects, he said.
"Those concerns led to an unexpected slowdown in ordering during the second quarter," Russo said.
Core profits fell to $1.9 million, or 4 cents per fully diluted share, down from $7.8 million, or 16 cents per share, a year ago. The figures exclude non-cash charges and one-time expenses.
Calix had alerted shareholders earlier this month that second-quarter revenues would fall below its previous estimate of $93 to $97 million.
The company's expectations for its third quarter weren't much better.
"We do not expect to see any return to normal. ... We are not planning on seeing any growth in the near future," said Michael Ashby, chief financial officer at Calix. "We previously told you our goal for 2012 was to grow revenue by 20 percent. Given the current environment, we believe that this target is now out of reach."
Customers have turned down about $50 million in stimulus funding for broadband projects, Ashby said.
However, international expansion continues to be a major goal for Calix, he said.
Calix provides equipment that enables Internet service providers to connect to more than 50 million residential and business subscribers over fiber and copper-based broadband networks. It has more than 600 employees, most of them at its headquarters in Petaluma. The company went public in 2010 with an $82 million stock sale.
Calix shares closed Tuesday at $4.67 on the New York Stock Exchange, down 5 percent from Monday's close, and down about 74 percent from a year ago.
UPDATED: Please read and follow our commenting policy: