Extreme Networks, a prominent network equipment manufacturer, saw its shares decline on Wednesday as the company issued a warning regarding the impact of lingering supply-chain challenges on its third-quarter growth.
The stock experienced a significant drop of 17% in premarket trade, trading at $13.75. Over the past 12 months, the stock has lost 8.7% based on Tuesday's closing price.
Earlier today, the North Carolina-based company, located in Morrisville, projected a third-quarter loss ranging between 50 and 55 cents per share. Additionally, they anticipate an adjusted loss ranging between 17 and 22 cents per share.
President and Chief Executive, Ed Meyercord, acknowledged the ongoing influence of the Covid-induced era of supply chain restrictions affecting their business. He stated, "The networking industry, similar to the broader IT sector, is gradually emerging from the final stage of supply chain constraints caused by the pandemic. However, we continue to experience the repercussions. Consequently, our distributors and partners have reduced their inventory purchases, a trend we expect will accelerate during the third quarter. Nevertheless, we are optimistic about returning to a more normalized level of revenue and earnings in the fourth quarter."
The future remains uncertain for Extreme Networks as they navigate these challenges brought about by supply chain disruptions. However, they remain committed to overcoming these obstacles and foresee a brighter outlook in the coming months.