Aviat Networks Lowers Q2 Revenue Outlook; To Cut Costs - Quick Facts

(RTTNews) - Aviat Networks, Inc. (AVNW), provider of microwave networking solutions, said it plans to reduce costs in order to better position the company for current and future demand cycles. The company is developing a plan to lower quarterly adjusted operating expense to about $28 million for the fourth quarter of fiscal 2014.

Aviat Networks expects cost savings from efforts to consolidate the its supply chain and locations globally, focus its selling efforts, leverage a single technology platform, and simplify its back office operations. The company currently expects the annual savings of these efforts to be about $12 million to $14 million entering fiscal year 2015.

Further, Aviat Networks said it is entering into a managed services agreement with a key customer and expects to defer about $5 million in second quarter of fiscal 2014 revenue. The company noted that its reported revenue will be impacted as it defers revenue on this agreement, and expects the net impact on deferred revenue related to this agreement to stabilize within the next three to four quarters.

Including the deferred revenue impact of the managed services agreement, Aviat Networks lowered its outlook for second-quarter revenue to a range of $83 million to $87 million due to lower than expected customer orders in Africa. The company had earlier forecast second-quarter revenue in a range of $100 million to $107 million that excluded any impact from the managed services agreement.

Although the change in revenue is expected to impact quarterly earnings per share, Aviat Networks said it was unable to quantify the expected impact at this time.

Aviat Networks will report complete second-quarter financial results after the market closes on January 30, 2014.