Reuters: Global Markets: Envivio shares plunge on cut in revenue forecast

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Envivio shares plunge on cut in revenue forecast Aug 14th 2012, 13:29 Tue Aug 14, 2012 9:29am EDT (Reuters) - Shares of Envivio Inc (ENVI.O) are set to open significantly lower on Tuesday after the video delivery company slashed its revenue outlook for the second quarter, citing weak spending by telecom carriers in North America and Western Europe. The stock was down nearly 46 percent in premarket trade. Analysts at both Stifel Nicolaus and Goldman Sachs said the company may be losing ground to rival Harmonic Inc's HILT.O video processing technologies. While Envivio had outgrown Harmonic in the prior five quarters, there was a sharp divergence in the second quarter, with Harmonic noting a record backlog and 25 new customers for its over-the-top services, Goldman analyst Simona Jankowski said. Stifel's Sanjiv Wadhwani also said Harmonic was becoming more of a competitive force in the market. Over-the-top video is provided over the internet rather than via a service provider's own dedicated, managed IPTV network. Goldman Sachs cut Envivio to "neutral" from "buy" and dropped it from its Americas Buy List, while Stifel halved its price target on the stock to $6. Envivio, whose customers include cable companies, cut its second-quarter revenue outlook to between $10 million and $11 million, from its earlier forecast of between $17 million and $18 million. Shares of the South San Francisco-based company have fallen by a third since going public in April this year. (Reporting by Megha Mandavia in Bangalore; Editing by Sriraj Kalluvila) Link this Share this Digg this Email Reprints

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