Novatel Wireless Appoints Mashinsky as Interim CEO - Analyst Blog
Leading wireless modem manufacturer, Novatel Wireless Inc. ( NVTL ), recently assigned Alex Mashinsky as the Interim Chief Executive Officer (CEO), replacing Peter Leparulo who will remain on the board of directors.
Failing to make a turnaround in Novatel's loss-making business, Leparulo, the previous CEO, has been compelled to step down. The company had appointed an executive search firm to aid them in the process of selecting the right candidate for the post.
Mashinsky, aged 48, has held an important position since 2004 in Governing Dynamics, an investment and development firm. Prior to that, he was the CEO of GroundLink, an information technology company.
In the recently concluded first quarter of 2014, Novatel posted dismal financial results. Total revenue in the reported quarter stood at $48.3 million, down 77.8% year over year and also below the Zacks Consensus Estimate of $52 million. Segment wise, Mobile Computing Products generated $36.2 million in revenues, down 108.8% from the year-ago quarter. Moreover, the company has slashed its outlook for the second quarter.
Novatel supplies LTE-based MiFi devices to the top three carriers in the U.S., namely, Verizon Communication Inc. ( VZ ), AT&T, Inc. ( T ) and Sprint Corp. ( S ). In an attempt to drive Mi-Fi usage, the company is continuously upgrading its software and launching innovative devices.
However, Novatel faces stiff competition from Asian manufacturers like ZTE and Huawei Technologies who provide low-cost devices. Moreover, in recent times, most smartphones have in-built hotspot facilities, thus completely bypassing the need for a MiFi modem.
Hence, diversification seems to be the only way to improve the present financial position of Novatel. Thus, it remains to be seen how the newly appointed CEO brings about an improvement in the current state of affairs for the betterment of the company.
Novatel currently carries a Zacks Rank #4 (Sell).
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