- The Avaya (AVYA) stock was trending in the previous trading session. This is why.
The Avaya (AVYA) stock was trending in the previous trading session as the price fell 56.94%. There were a couple of catalysts that affected the stock price.
Avaya announced that Alan Masarek was appointed as its President and CEO and as a member of Avaya’s Board of Directors, effective August 1, 2022. Masarek will succeed Jim Chirico, who will be removed from his positions as President and CEO of Avaya, effective August 1, 2022, and is resigning as a member of Avaya’s Board. Chirico will remain employed with Avaya through August 16, 2022 and will work with Mr. Masarek to ensure a smooth transition for all stakeholders.
Avaya also recently announced certain preliminary financial results for the third quarter ended June 30, 2022 and expects to release full results for the third quarter on August 9, 2022.
Based on the information currently available for the third quarter ended June 30, 2022, the company expects revenue to be between $575 million and $580 million, compared to guidance of $685 million to $700 million, and Adjusted EBITDA to be between $50 million and $55 million, compared to guidance of $140 million to $150 million. And the company is also finalizing testing of its goodwill and intangible assets that is expected to result in significant non-cash impairment charges as of June 30, 2022.
Avaya also announced it has initiated cost-cutting measures that are expected to primarily impact the company’s overall selling, general and administrative expenses, as well as discretionary spending. And these actions are expected to generate between $225 million and $250 million in annual cost reductions beginning in the first quarter of fiscal 2023. The company is expecting to minimize any impact to customers with respect to sales and support, and remains committed to Avaya’s long-range innovation and product development roadmaps.
The company’s prior financial guidance should no longer be relied upon. And management will provide additional information in conjunction with the upcoming release of its full third quarter 2022 financial results.
The financial results for the three months ended June 30, 2022 included in this announcement were preliminary, have not been reviewed or audited, are based upon Avaya’s estimates, and were prepared prior to the completion of the company’s financial statement close process.