Ceragon Networks Shares Slide Down 14% on Slow Forecast

Tallahassee, FL 11/7/11 (StreetBeat) -- Ceragon Networks (Nasdaq: CRNT) shares are trading sharply lower Monday morning despite better-than-expected Q3 results, as the company warned that business growth in the near-term will be slower than expected.

For the quarter, the wireless backhaul equipment provider posted revenue of $116.1 million, with non-GAAP profits of 2 cents a share, ahead of the Street consensus at $114 million and a penny a share. Revenue was up 5% sequentially, and 86% from a year ago.

“We expect to continue growing revenues, probably at a slower pace than originally expected because we cannot ignore the macro economic uncertainty and the issues in India affecting order patterns,” CEO Ira Palti said in a statement. “Our plan to migrate customers to lower-cost higher functionality and capacity products is proceeding smoothly, and we continue to expect we will reach our gross margin target of the mid-30s by the end of next year. Given the current level of visibility, we believe targeting a non-GAAP operating margin of 8%-9% by the end of 2012 is realistic.”

For Q4, the company sees revenues of $116 million to $121 million, below the previous Street consensus of $122.9 million.

CRNT is down $1.48, or 14.30%, to $8.87.

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