August 5, 2008 / 9:52 PM / 10 years ago

UPDATE 2-Synchronoss Q2 profit slumps on lower iPhone revenue

(Adds outlook, analyst comments)

By Bijoy Anandoth Koyitty

BANGALORE, Aug 5 (Reuters) - Communication software maker Synchronoss Technologies Inc (SNCR.O) reported a 52 percent drop in quarterly profit as revenue associated with Apple Inc’s (AAPL.O) iPhone declined, sending its shares down 11 percent.

Synchronoss said in June that its account activation technology will not be used with Apple’s new 3G iPhone. The company gets paid when U.S. iPhone customers activate their devices with AT&T Inc (T.N).

The company also forecast third-quarter revenue below analysts’ expectations.

The company expects earnings of 11 cents to 13 cents a share, excluding items, on revenue of $26 million to $28 million for the third quarter, a company executive said in a conference call with analysts.

Analysts on average were expecting earnings of 12 cents a share, on revenue of $29.2 million, according to Reuters Estimates.

For 2008, the company sees revenue of $110 million to $117 million. Analysts were looking for $117 million.

Synchronoss’ ability to sign players such as Sprint Nextel Corp (S.N), Vodafone (VOD.L) and Brightpoint Inc CELL.O for a longer term would be crucial to drive value in the future, Avondale Partners analyst John Bright said.

    “Their core business continues to remain strong; they need to demonstrate that with additional customer wins, going forward,” Bright, who has a “market perform” rating on the stock, said by phone.

    The company posted earnings of $2.6 million, or 8 cents a share, for the second quarter ended June 30, compared with $5.4 million, or 16 cents a share, a year earlier.

    Net revenue fell more than 22 percent to $24.3 million.

    Analysts on average were expecting earnings of 9 cents a share, on revenue of $24.6 million, according to Reuters Estimates.

    Shares of Synchronoss were trading at $11 after the bell. They closed at $12.35 Tuesday on Nasdaq. (Editing by Deepak Kannan)

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