PairGain Technologies Predicts Losing Quarter

Data Networking Firm

Officials at Tustin-based PairGain Technologies Inc. said Monday that revenue will fall as much as 20% below expectations this quarter and that the company will post a quarterly loss for the first time in four years.

Saying that the company was “at a low point” in its core business of high-speed data networking products, chief executive Michael Pascoe said the revenue drop resulted from increased competition and a hole in its sales team that has recently been filled. Analysts had expected the company to earn 2 cents a share in the third quarter on revenue of just under $60 million.

The company saw its stock dip 69 cents, or 5%, to $12.19 a share Monday in Nasdaq trading. Earlier in the session the shares had traded as low as $10.75.

The company also announced that it has lined up its second customer, a small South Carolina telecommunications company, for its next-generation networking system, called Avidia. PairGain has bet its future on Avidia, and the stock surged 23% Friday after a report that PairGain was close to securing a contract to supply the system to MCI WorldCom Inc.