Home Business Telecoms 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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Sam Varghese has been writing for iTWire since 2006, a year after the sitecame into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

 

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