Cabling issue costs Mellanox $20M in revenue, sends shares tumbling

The company lowered Q4 guidance citing, among other factors, a technical issue with its 56-Gbit/sec InfiniBand cabling.

As several financial-news agencies have reported, shares of Mellanox (NASDAQ: MLNX) fell by double-digit percentage points after it announced on January 2 that its fourth-quarter revenue would come in at between $119 million and $121, well below its previous guidance of $145 million to $150 million for the quarter.

When announcing the revised guidance, the company said, “The shortfall is primarily the result of a weaker demand environment, challenging macroeconomic conditions, and a technical issue associated with FDR 56 Gb/s InfiniBand cabling which caused approximately $20 million of FDR deployments to be delayed. The cabling issue has been resolved and is not expected to impact revenue in the future.”

FDR stands for “Fourteen Data Rate” and refers to 56-Gbit/sec InfiniBand. Mellanox offers active optical cables (see data sheet) and passive copper cables (see data sheet) for FDR 56-Gbit/sec InfiniBand transmission in data centers.

Mellanox has planned a conference call for Wednesday, January 23 at 5pm EST to discuss its fourth-quarter 2012 financial results.

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