The Santa Clara, Calif.-based company also reported a wider-than-expected fiscal third-quarter loss of $5.70 per diluted share, wider than the $0.80 loss in the prior-year period. Capital IQ had expected a $0.07 loss.
Avaya said it recorded a $657 million non-cash goodwill impairment charge related to its products and solutions segment. "The charge was taken after an interim assessment prompted by a sustained decline in the company's stock price during the period, which the company believes was due to year-to-date financial results and revision of fiscal 2019 guidance," it said.
Revenue in the quarter ended June 30 fell to $720 million from $755 million last year and ahead of the Street's expectations for $716 million.
"I am pleased with our solid execution and the continued strength in our strategic growth areas, especially in our public and private cloud ReadyNow offers," said Chief Executive Jim Chirico. "The progress we have made drive third-quarter financial results toward the high end of our guidance and continued into the fourth quarter as demonstrated by two landmark government wins."
Chirico said the company was in "advanced discussions with multiple parties on a range of strategic transactions to maximize shareholder value" and expects to "bring this process to a conclusion within the next 30 days."
Avaya shares were up nearly 11% higher in early afternoon trading.
For the quarter, Avaya said products revenue slipped to $298 million from $322 million last year while services slid to $422 million from $433 million. Operating expenses jumped to $1 billion from $401 on the impairment charge.
Avaya slightly lowered its full-year non-GAAP revenue to between $2.92 billion and $2.94 billion from $2.925 billion to the $2.975 billion expected in May. Non-GAAP operating income is now seen between $626 million and $641 million from $625 million to $660 million.
For its current quarter, the company expects $738 million to $758 million in non-GAAP revenue and non-GAAP operating income of $162 million to $177 million.
Price: $11.49, Change: $+1.21, Percent Change: +11.77%
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