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Investing.com -- Calix reported first-quarter guidance that was well short of Wall Street estimates as some of its customers pause network equipment spending plans as they prepare to apply for U.S. government broadband funding stimulus aimed at bridging the digital divide by expanding high-speed internet access across the country.
Calix Inc (NYSE:CALX) fell 22% in afterhours trading following the report.
For Q1, the company sees adjusted EPS in a range of $0.17 to $0.23 on revenue of between $225M to $231M, well short of analyst estimates of $0.38 and $267.5M.
The weaker guidance comes as the company expects its appliance shipments to slow as its telecom service provider customers pause their broadband appliance purchases to assess spending plans and mull plans to apply "for the tens of billions of government stimulus dollars," the company said, referring to several U.S. government programs such as U.S. Broadband Equity, Access and Deployment Program.
The $42B BEAD program aims fund broadband infrastructure and adoption programs to increase high-speed internet adoption, prioritizing areas that have low-speed, or no internet.
"With this background and considering a few significant customers in 2023 are pausing their purchases in early 2024 as they re-evaluate their capital expenditures, our revenue guidance for the first quarter of 2024 is for revenue to be between $225 million and $231 million," it added.
The weaker guidance offset Q4 results that beat estimates, with Q4 adjusted EPS coming in at $0.43 on revenue of $264.7M, compared with estimates of $0.36 on revenue of $264.4M.