Security vendor blames World Cup for sales drop

Secure Computing claims that a European deal fell through because executives were watching the World Cup

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

The firm is now expecting second-quarter revenues of $38.5m to $39m, more than 10 per cent short of the previously predicted range of $43m to $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 said in a conference call that he was " disappointed and embarrassed" by the shortfall.

He explained that the mishap was caused in part by a $2.55m European deal that fell through.

The management of one of Secure Computing's partners was watching the World Cup and could not 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," said McNulty.

"We were notified that the customer 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 [who] had to make the decision were unreachable. So they said this had to wait until everybody gets back."

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

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

Analysts questioned the timing of the deal given the disappointing financial quarter. Secure Computing's stock fell by nearly 40 per cent in after hours trading, wiping about $283m off the company's market capitalisation.