Smith Micro Software Loss Wider Than Expected, To Cut Jobs, Stock Plunges

(RTTNews) - Smith Micro Software Inc. (SMSI), a provider of wireless and mobility solutions, Thursday reported a narrower first-quarter loss, but revenues declined 27 percent due to seasonality in the company's Productivity and Graphics business. The adjusted loss was wider than expected.

Further, the company said additional cost cutting measures were necessary, including headcount reduction by about 20 percent. The stock plunged over 32 percent in the extended trade.

Net loss was $5.2 million or $0.14 per share compared with a loss of $6.2 million or $0.17 per share last year.

Excluding items, adjusted loss for the quarter was $2.7 million or $0.07 per share, while it totaled a loss of $3.1 million or $0.08 per share a year ago.

On average, three analysts polled by Thomson Reuters expected a loss of $0.05 per share. Analysts' estimates typically exclude special items.

Revenues fell 27 percent to $8.4 million from $11.6 million in the prior year,. Analysts expected revenues of $9.79 million.

William Smith Jr., CEO, said, ''While we typically see a drop in revenue from the fourth quarter to the first quarter each year due to seasonality in our Productivity and Graphics business, this year's decline was more strongly felt since, as expected, the 19% customer in Q4 did not contribute any revenue to Q1."

Further, the company said a significant potential deal did not materialize and that uncertainty regarding the timing of future revenues have led to the need for additional cost cutting measures.

As a result, the company is taking immediate steps to further lower its cost structure by about $2 million per quarter. The Board has approved a restructuring plan that would streamline its organization and reduce overall headcount by about 20 percent.

The restructuring plan will result in one-time severance and other special charges of about $1.6 million to $2 million, which will be reported in the second quarter.

The stock closed up 0.7 percent at $1.49 on Thursday, but plunged 32.2 percent in the extended trade.