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Earnings: Openwave Revs Lower Than Expected In Q3; Improves Losses; Restructuring Coming

Openwave Systems, the Redwood City, Calif. company that helps manage and monetize the mobile Internet, released earnings for the third quarter ended March 31, saying that while revenues fell in the period compared to a year ago, its losses narrowed. Third quarter revenues totaled $58 million compared with $63.2 million in the prior quarter and $62.7 million in the preceding year. The company said the lower than expected revenues, were impacted by a number of key contracts for which purchase orders had not been received by the end of the quarter. The company’s Q3 net loss was $14.7 million, or 18 cents a share, compared to a net loss of $32.5 million, or 35 cents a share in the same period in the preceding year. In the prior quarter, the company recorded a profit of $4.9 million, or 6 cents a share, based on the asset sale of Musiwave to Microsoft (NSDQ: MSFT) . Release. Call transcript.

From the earnings call:

— Charles Levine, the company’s chairman said as previously announced Bruce Coleman was appointed to the position of Interim CEO, replacing Robert Vrji, who resigned. The company has also hired Spencer Stuart to search for a new CEO.

— Levine said the board and management team are planning a strategy for Openwave (NSDQ: OPWV) to attain long-term growth and profitability, including restructuring the sales organization and broadening customer targets. “We are convinced that the current plan to focus our product set while reducing our cost structure puts the company on the right track,” he said.

— In Q3, the company took a $5.9 million charge related to severance cost. The company expects to incur additional restructuring charges over the next few quarters of about $10 to $13 million. The majority of the restructuring will be completed by the end of September 2008. The restructuring should reduce total expenses by $50 million a year, with savings coming from labor related expenses and reductions in infrastructure costs. “Although we will begin to see some impact from the restructuring in the fourth fiscal quarter of 2008, these savings will be offset by some seasonally higher expenses. The full impact of restructuring will be achieved as we exit the second fiscal quarter of 2009,” but there’s no timeline in respects to profitability, said Anne Brennan, Interim CFO.