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Acme Packet Points to Capex Weakness

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Tue, 10 Jul 2012

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Acme Packet Inc. (Nasdaq: APKT) trimmed its predictions for the second quarter, saying Friday that North American service-provider spending has been weak.

The company is predicting second-quarter revenues of $66 million to $68 million. Analysts polled by Thomson Reuters were expecting $73 million.

Non-GAAP earnings are likewise going to disappoint: Acme Packet is expecting 12 to 13 cents per share, whereas analysts were expecting 17 cents.

The company's stock was down $2.77 (15%) at $15.63 by midday Friday. Acme Packet's earnings will come out on July 26.

Why this matters
Earnings season starts next week, and this is a bad sign for any vendors with a heavy wireline dependency.

Jefferies & Company Inc. analyst George Notter already noted, a couple of weeks ago, that wireless is the healthier half of telecom spending at the moment. But the attention on 4G is coming at the expense of wireline spending; Notter pointed to Acme Packet and Adtran Inc. (Nasdaq: ADTN) as being in particularly vulnerable spots.

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— Craig Matsumoto, Managing Editor, Light Reading