Occam cuts 10% of staff amid broadband stimulus chill
Occam Networks (Nasdaq: OCNW), considered to be a likely beneficiary of federal broadband stimulus initiatives, reported today that it is cutting 10% of its staff amid a sales slowdown it attributes in part to customers slowing purchases due to uncertainty over broadband stimulus allocation.
The access equipment vendor reported first-quarter revenue that was flat from a year earlier and down 39% sequentially to $19.4 million. And it is expecting second-quarter revenue to be sequentially flat.
“This weakness reflects the current economic conditions as well as a delay effect while our customers evaluate the timing and availability of potential government broadband stimulus funds,” said Bob Howard-Anderson, Occam’s chief executive officer, in a statement.
Occam’s remarks are consistent with other industry reports of a “chilling effect” among broadband providers caused by uncertainty over the specifics of the stimulus program, which is still shrouded in mystery as the government works to spell out more specificially how funds will be awarded.
But Occam’s remarks today contrast sharply with those of another broadband equipment vendor, Adtran, which reported last month that the prospect of stimulus awards was catalyzing activity in the market.
May 7th, 2009 at 8:32 am
Ed,
You got the Occam revenue numbers backwards. Revenues were flat year over year, and down 39% sequentially. You might want to note that Occam commented last quarter that revenues at that point were artificially high due to the closure of a contract. That might add necessary color to the 39% sequential loss. I also found Adtran’s comments to to be not as divergent from Occam’s as you imply. I think Occam’s CEO lacks delivery skills. Thanks!
Kevin Brennan
May 7th, 2009 at 8:38 am
Ed,
My apologies! Upon a second read I see you got the revenue numbers correct. So sorry!
Kevin Brennan
May 7th, 2009 at 8:45 am
Thanks, Kevin; I corrected the text. My apologies to Occam and to readers.
And thanks for noting the color on the sequential revenue number.
You have a fair point on Adtran, as Adtran said they were not seeing orders yet based on broadband stimulus. But they also said that, due to stimulus, they were seeing activity in some places where before there was much less. They described it as a ‘dramatic’ improvement, whereas Occam described it as a negative trend.
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