The Black Box

[ljm]

Regarding SONS 3Q margins: I snipped this out of an SI post courtesy of COOTERS SB notes.

SNIP
<<Gross margins for the third quarter came in at 48.6%,
down from 2Q levels of 63.6%, and below the company's long-term model of 58% to
62%. According to the CFO, Sonus incurred costs but did not recognize revenues on the
$4.7 million of product related to the renegotiation of maintenance and support
arrangements with two customers, and this impacted overall GMs by 480 bps in the
quarter. In addition, this quarter's revenues had a higher percentage of third party
components, which have lower gross margin profiles. Despite these 3Q issues,
management reaffirmed full-year GMs guidance in the range of 58% to 62%.
Operating expenses for the quarter were $28.1 million, below the $29.1 million Sonus
reported in the second quarter.>>SNIP