Security vendor blames World Cup for dramatic sales drop

Secure Computing, a maker of network protection appliances, claimed that the World Cup in Germany played a major role in the company's disappointing financial results.

The company projected revenue over the second quarter to reach US$38.5m to US$39.0m, more than 10 percent short of the previously predicted range of US$43 to US$45m. The revenue warning set off a nearly 40 per cent drop in the company's stock in after hours trading.

Chief executive Jon McNulty in a conference call said that he was " disappointed and embarrassed by the shortfall."

He explained that the mishap in part was caused by a US$2.55m European deal that fell through. Staff for one of Secure Computing's partners was watching the World Cup and couldn't be reached, preventing the company from closing the sale in the second quarter.

"The distributor and customer were interested in moving quickly. The distributor was interested in getting the order shipped for Q2 also. Everything was go until Friday morning the 30th," McNulty said.

"We were notified that the customer in a meeting had questioned the reseller that had been selected. [They] then called and there was not the appropriate management on hand. It was Friday afternoon in the summer and the World Cup was going on in Europe.

"Four of the five people were unreachable, [who] had to make the decision. So they said this had to wait until everybody gets back."

Secure Computing plans to release it final earnings later this month.

The company on Tuesday also unveiled that it plans to acquire CipherTrust that secure corporate messaging systems. Secure Computing will pay US$273.6m, two thirds of which will be paid in cash and the remainder in comapny stock.

Analysts questioned the timing of the deal given the disappointing financial quarter.

Secure Computing's stock price fell by nearly 40 percent in after hours trading, wiping out about US$283m of the company's market capitalization.