Acme Packet stock takes a hit as it lowers guidance for year

Session Border Controller stalwart Acme Packet (Nasdaq: APKT) reports that it is going to miss the mark on its earlier fourth quarter guidance, a victim of a turbulent service provider market in North America.

The Wednesday said sales for the year would come in at $308 million to $310 million, missing its earlier guidance of $315 million to $320 million; fourth quarter revenues are expected to range between $84 million to $86 million.

Pre-share earnings on a non-GAAP basis for 2011 will be between $1.03 and $1.05, compared to its earlier outlook of between $1.14 and $1.18.

Acme Packet's stock stumbled some 20 percent on the news but has begun to recover somewhat today.

"Outside of the North American service provider market, Acme Packet continued to perform very well--particularly in our enterprise business as well as in our Europe and Latin America businesses," said Andy Ory, president and CEO of Acme Packet, Inc. "Looking ahead, we believe we are very well positioned to leverage the broad, multi-year, secular growth drivers associated with the global transition from TDM to IP for real time communications like voice and video."

The company will focus on improving its visibility and the level of predictability in the business in the backdrop of the current North American service provider capital expenditure environment.

The enterprise session border controller (SBC) market was busy earlier in 2011, with the seeing a 55 percent jump in the first quarter. Hosted unified communications and SIP trunking were among factors that played a role in the growth. As in the service provider SBC segment, Acme Packet is the lead dog in the enterprise market, with Cisco Systems in second place, followed by Ingate and Sipera.

The enterprise SBC market, however, remains fragmented below that top tier, which means declining prices may loom.

For more:
- see this release

Related articles:
Infonetics: SBC market a $1B business by 2015; Acme Packet top vendor
Acme Packet launches first SBCs to be qualified under Microsoft's new Enterprise SBC category in UCOIP
Acme Packet E-SBCs integrated in to HP's UC solutions
Acme Packet expands SBC lead with new PLDT deal