Tut Systems Warns on Q2 Earnings

Tut Systems, which supplies encoding and content processing systems, expects its financial results for the second quarter ended June 30, 2006 to be below previously issued guidance. Preliminary estimate of second quarter revenue is approximately $8.2 million. Gross margins will also be impacted as fixed costs become a higher percentage of total cost of goods sold. The company stated that sales for the quarter were adversely affected by several large digital TV headend orders that did not close in this quarter as expected and by lower than planned revenue from its new T2 products.



"We are disappointed in the preliminary results for the quarter, as a number of potential new IOC/PTT customers extended their IPTV purchase decisions into later periods and revenue from our new T2 products was impacted by production ramping issues," said Sal D'Auria, Chairman, President and CEO of Tut Systems. "Nevertheless, we are encouraged by the continued high level of IOC/PTT interest in deploying video services, existing customer upgrades to our MPEG-4 AVC High Definition solutions, and the initial interest we are seeing in our new innovative T2 products. We have also made meaningful progress this quarter with the various tier 1 opportunities that we have been pursuing."http://www.tutsys.com