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[January 04, 2013]
Mellanox CEO: It happens to the best of companies
Jan 04, 2013 (Globes - McClatchy-Tribune Information Services via COMTEX) -- Two weeks after "Globes" revealed that Mellanox Technologies Ltd. (Nasdaq:MLNX; TASE:MLNX) was on the way to a revenue warning, the communications equipment company from Yokne'am confirmed the fears yesterday. Mellanox will report revenue of $110-121 million of the fourth quarter of 2012, compared with previous guidance of $145-150 million, a 20 percent undershoot.
The disappointing revised guidance cost Mellanox's share price an 18 percent drop, making the company's market cap $2.1 billion, 60 percent below the peak it reached in September 2012.
In the announcement it released after the close on Wall Street yesterday, the company explained that the reason for the hit to revenue was a fall in demand for its products, because of the challenging business environment, and, mainly, a technical hitch to do with cables in its 56Gb solutions.
In the six years that Mellanox has been a public company, this is the first time it has failed to meet its guidance. This is particularly important in view of the fact that Mellanox has accustomed investors to pleasant surprises.
Eyal Waldman, CEO of Mellanox, how did you sleep last night "I slept well. I don't feel good about the fact that we have not met our guidance, but I understand that it's part of the game, and that also includes an unpleasant feeling. Nevertheless, once we are doing the best we can, I feel fine. It happens to the best companies, and we hope that it won't happen to us again. I don't see it as a disaster." Waldman rejects the criticism accusing the company of a lack of transparency towards investors. "Mellanox is a very transparent company," he says. "When we know things for certain, we share them with the public. Last year, when we saw that revenue was rising by more than we expected, we didn't rush to tell, and also when we saw that sales were not up to expectations, we behaved accordingly. We are a responsible company." Waldman says that the company will comment on the next quarter, the first of 2013, in the conference call on the release of the fourth quarter financials on January 23. In any event, he says, "We feel that we will continue to grow in relation to 2012, our growth engines have not changed, and we believe that we will grow." ___ (c)2013 the Globes (Tel Aviv, Israel) Visit the Globes (Tel Aviv, Israel) at www.globes.co.il/serveen/globes/nodeview.asp fid=942 Distributed by MCT Information Services
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