Avaya reported a net loss of USD 633 million for its fiscal third quarter to June, hurt by an impairment charge of USD 657 million to write down goodwill at its Products & Solutions division due to reduced prospects. The company also withdrew its long-term outlook, saying this will be updated after it completes its evaluation of takeover offers, expected in the next 30 days.
Underlying results were in line with Avaya's guidance. Revenues rose 3.6 percent year-on-year to USD 717 million, while adjusted EBITDA fell to USD 167 million from USD 175 million a year ago. Operating cash flow reached USD 52 million, and the company had total cash of USD 729 million at the end of the quarter, down slightly from USD 735 million three months earlier.
The company announced in May that it was considering a number of "strategic alternatives" after receiving expressions of interest from potential buyers. In an update of the talks, Avaya said it's "in advanced discussions with multiple parties on a range of strategic transactions to maximize shareholder value. We expect to bring this process to a conclusion within the next 30 days."
The impairment charge during the quarter was due in part to the sharp fall in share price since the start of the year and the profit warning in May. The stock has fallen from a price of over USD 19 in April to just over USD 10 in recent days. Avaya said its long-term outlook issued at its investors day in December was no longer valid and would be updated after the strategic transactions were decided.
For fiscal Q4, the company forecast revenues of USD 735-755 million and adjusted EBITDA of USD 183-198 million. Avaya also narrowed the range for full-year results, with revenues expected at the low end of its previous guidance, at USD 2.90-2.92 billion, and adjusted EBITDA at USD 705-720 million.
