5 Companies That Had A Rough Week

The Week Ending April 28

Topping this week's roundup of companies that had a rough week is solution provider Platte River Networks, which faces congressional calls for criminal charges to be filed against the CEO.

Also making the list this week were Webroot, for an update that flagged Windows files and major websites as phishing sites; Microsoft, for missing expectations on its Surface sales; Qualcomm, for slashing its earnings forecast due to its pending court case with Apple over royalties; and AT&T, for its record-low equipment sales and upgrade rates in the wireless space.

Not everyone in the IT industry was having a rough go of it this week. For a rundown of companies that made smart decisions, executed savvy strategic moves – or just had good luck – check out this week's Five Companies That Came To Win roundup.

Platte River Networks CEO Faces Congressional Calls For Criminal Prosecution

The Republican congressman leading the investigation into Hillary Clinton's email server called Thursday for the U.S. Department of Justice to press criminal charges against the CEO of solution provider Platte River networks.

Rep. Lamar Smith, R-TX, asked the Justice Department in a letter to consider criminal charges against CEO Treve Suazo. Smith blames Suazo for allegedly failing to cooperate with the investigation, failing to produce documents, failing to produce employees for interviews, making false statements regarding access to the documents, and obstructing the investigation.

It's not yet clear if the Justice Department intends to follow through with the congressman's request. The FBI has already undertaken a criminal investigation into the classified material on the server and didn't ultimately file any charges against the Clintons.

Webroot Update Flags Windows Files As Malware, Major Websites As Phishing Sites

Security company Webroot found itself in crisis mode this week when an update of its software Tuesday inadvertently flagged customers' Windows system files as malware and marked several major websites as phishing sites.

The Windows system files were marked as general malware and quarantined, leaving some applications unable to function for 13 minutes. The update also caused many false positives, most notably marking multiple popular websites, including Facebook, as phishing sites, preventing users from visiting them.

One silver lining to the incident was that it gave some Webroot MSP partners an opportunity to play the hero and help their clients remediate the problems.

Microsoft Surface Sales Miss Expectations After Company Passed On Updating 2-in-1 Tablets

Sales of Microsoft's Surface Pro 4 and Surface Book plunged by 26 percent after the company passed on updating the Surface Pro line of 2-in-1 tablets in 2016 and offered only a minor update for the Surface Book detachable laptop.

The company's Surface Pro 4 dates to the fall of 2015.

Sales of Surface products were $831 million in Microsoft's fiscal third quarter, ended March 31, down from $1.11 billion a year earlier. CEO Satya Nadella said the Surface results "fell short of expectations" and cited increased price competition as a key reason for the sluggish results.

The drop in Surface product sales and the absence of phone revenue – the company unloaded its phone business in November – fueled a 7 percent decrease in revenue for Microsoft's personal computing segment during the quarter.

Qualcomm Slashes Earnings Forecast Due To Apple's Nonpayment of Royalties

Qualcomm cut its current-quarter profit and revenue forecasts after Apple decided to withhold royalty payments to its contract manufacturers until a dispute over royalty payments is resolved in court.

"Apple has now unilaterally declared the contract terms unacceptable, the same terms that have applied to iPhone and cellular-enabled iPads for a decade," Don Rosenberg, Qualcomm's general counsel, said in a statement.

The payments made by Apple to its contract manufacturers are, in turn, owed by the contractors to Qualcomm in royalties, according to Qualcomm's licensing business model. Apple sued Qualcomm in January, accusing it of overcharging for chips and refusing to pay some $1 billion in promised rebates.

AT&T Sees Record-Low Wireless Equipment Sales And Upgrade Rates

AT&T's consolidated revenues slipped 2.8 percent because of "record-low" equipment sales and upgrade rates in the wireless space, according to John Stephens, the company's senior executive vice president and CFO.

Stephens said the company had its lowest-ever postpaid upgrade rate, selling one million fewer phones than a year ago.

AT&T also shed postpaid customers in the quarter due to the re-introduction of unlimited data plans, with the company reporting 61,000 fewer postpaid subscribers during the quarter.

Telecom rival Verizon also struggled with the re-introduction of unlimited data plans, losing 307,000 retail postpaid subscribers on a net basis during its first quarter.