Home Business Telecoms Vocus downgrades earnings forecast by $100m, shares dive

Vocus downgrades earnings forecast by $100m, shares dive

Australia's fourth biggest telecommunications company Vocus has issued a second profit warning in six months, downgrading its earnings forecast by almost $100 million and causing its shares to fall by close to 30%.

Vocus, which owns iPrimus and dodo among other brands, laid the blame for Wednesday's downgrade on delays in revenue from major projects contracts and earning less than expected from its New Zealand energy retail business.

The company said in a note issued after close of trading on Tuesday that following a detailed review of trading at the end of the third quarter for 2017, and the outlook for the fourth quarter, that revenue for the full year was expected to be $1.8 billion, compared to its earlier guidance of $1.9 billion.

It said that underlying earnings for year ending 30 June, would be between $365 million and $375 million, a decrease of 19% in what had been estimated earlier.

In November, earnings were downgraded to between $430 million and $450 million.

As to underlying profit after tax, Vocus said it now expected a drop of 26% from earlier forecasts, to something between $160 million and $165 million. The previous forecast had been for a sum ranging from $205 million to $215 million.

Vocus shares have been hit twice recently in the past, once in November following the announcement of the downgrade in earnings.

And in October, a failed bid to oust chief executive Geoff Horth led to a fall as well.

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Sam Varghese

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A professional journalist with decades of experience, Sam for nine years used DOS and then Windows, which led him to start experimenting with GNU/Linux in 1998. Since then he has written widely about the use of both free and open source software, and the people behind the code. His personal blog is titled Irregular Expression.