PairGain Stock Dives After Earnings’ Report

A day after PairGain Technologies Inc. posted an 84% gain in earnings, the stock took a beating, apparently because the earnings still disappointed analysts and investors.

PairGain shares fell $4.125 to $25.75 as 13.2 million changed hands, about eight times the three-month daily average. It was the third-most active stock in U.S. markets.

A day earlier, PairGain posted net income of $11.4 million, or 15 cents a share, for the first three months, up from $6.2 million, or 9 cents a share, a year ago. Revenue advanced 75% to $70.7 million from $40.5 million. Analysts had expected earnings of 17 cents a share, according to a survey of 12 analysts by IBES International Inc.

The company’s receivables, or bills not paid yet by customers, increased to 45 days of sales, compared with 34 in the fourth quarter, said Joe Noel, an analyst at Hambrecht & Quist. Rising receivables can indicate a company is giving discounts to boost sales. The company designs and manufactures telecommunications systems.