UTStarcom sink after 2Q results disappoint

Shares of UTStarcom Inc. sank Thursday after the telecommunications equipment maker posted second-quarter results one analyst called "mixed."

The company had posted a smaller net loss as sales grew 18 percent, to $632.8 million from $538.2 million.

Jefferies analyst William Choi, who downgraded UTStarcom to "Underperform" from "Hold," said the company faces several challenges even though the divestiture of its non-core businesses is largely done.

The company, he said, faces a "lumpy revenue stream," as well as "hefty" operating losses and a high cash burn. In addition, Choi said further restructuring might be necessary.

The quarter's operating loss was $31.1 million, compared with an operating loss of $55.3 million a year earlier.

Shares of the Alameda, Calif.-based company fell $1.28, or 27.5 percent, to $3.38. The stock has traded in a 52-week range of $2.23 to $5.94.