"Fool me once, shame on... shame on you. Fool me... you can't get fooled again."
-- George W. Bush

Is Acme Packet (Nasdaq: APKT) fooling investors twice?

The session border controller specialist updated its guidance last night, and it's not pretty, with shares down roughly 20%. It expects revenue in the fourth quarter to be between $84 million and $86 million, giving way to non-GAAP earnings per share in the range of $0.26 to $0.28. Those figures are short of what the market was expecting, with consensus estimates calling for $93.4 million in sales and $0.37 per share in profit.

This is the second consecutive quarter that Acme Packet has given a gloomy sneak preview of what to expect from imminent earnings releases. Last time, I even considered the sell-off a case of market overreaction because the third-quarter miss was attributed to a large delayed order from Acme's biggest customer, AT&T (NYSE: T). The revenue from the order was supposed to be pushed back into the fourth quarter.

When the company officially released third-quarter results a couple of weeks later, shares sold off again even though there were no surprises. Acme had notably reaffirmed its full-year guidance when it revised its guidance the first time around, expecting sales between $315 million and $320 million for the year, which contributed to my notion that the plunge was misplaced.

Acme now sees full-year revenue in the range of $308 million to $310 million. It expects full-year non-GAAP profit of $1.03 to $1.05, down from the prior outlook of $1.14 to $1.18.

The weak results were attributed to "uncertainty in North American service provider markets," while Europe and Latin America remain strong. The concern is that the carriers are cutting back their capital budgets, which contrasts with earlier assumptions that Ma Bell's failed pursuit of T-Mobile would free up its checkbook. Network equipment makers had jumped after that deal fell through on such hopes.

Acme also counts Verizon (NYSE: VZ) as a major customer, and on the last conference call, Acme CEO Andy Ory brushed off analyst concerns that Verizon's business was wavering. If both AT&T and Verizon are cutting back their orders, then that would certainly qualify as "uncertainty in North American service provider markets," since the pair are the two largest domestic wireless carriers.

I've liked Acme Packet's long-term potential as carriers transition to VoIP, but I'm putting it in the penalty box for the time being. Management is starting to lose credibility with two consecutive downward guidance revisions, and risks and uncertainty are now piling up.

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