Comverse (CNSI) Posts Q2 GAAP Loss of 75c/Share; Commences Expansion of Restructuring Plan
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Comverse (NASDAQ: CNSI) reported Q2 EPS of ($0.75), $0.60 worse than the analyst estimate of ($0.15). Revenue for the quarter came in at $115.32 million versus the consensus estimate of $119.67 million.
Expanded 2014 Restructuring Initiatives
On September 9, 2014, we commenced an expansion of our previously disclosed 2014 restructuring plan. We expect that as a result of the restructuring plan (as expanded), our global workforce will be reduced by approximately 14% and that our annual cost of revenue and operating expenses will decrease by approximately $30 million to $40 million. The restructuring plan has been facilitated by efficiencies gained through initiatives implemented in recent fiscal periods and the expectation that software will account for a higher portion of our revenue in future periods. The restructuring plan is designed to align operating costs and expenses with currently anticipated revenue.
The restructuring plan (as expanded) is expected to include reduction of workforce included in cost of revenue, research and development and selling, general and administrative expenses. The aggregate total cost of the 2014 restructuring plan (as expanded) is currently expected to be approximately $15.0 million to $17.0 million, primarily related to severance costs which are expected to be accrued and paid by January 31, 2015. As previously disclosed, the aggregate total cost of the 2014 restructuring plan (prior to expansion) was expected to be approximately $9.0 million. In relation to this restructuring plan, we recorded severance-related costs of $5.0 million and paid $3.5 million during the six months ended July 31, 2014.
For earnings history and earnings-related data on Comverse (CNSI) click here.
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