Shares in wireless broadband provider Netcomm Wireless Ltd (ASX: NTC) slumped 5 per cent today after the company announced it now expects FY2016 earnings to be marginally down on last year.

Full year earnings are now expected at $6.4 million, with the company blaming the earnings fall on a $4.3 million investment in staff and infrastructure, alongside a $0.7 million non-cash accounting expense associated with share appreciation rights.

The company also advised that if you back out the costs associated with investment in staff, skills and infrastructure then full year earnings of $11.4 million would be up 25.3% on FY2015.

 

However, backing out standard business costs like this cannot alter the fact that falling earnings is not what is expected from a tech business that some thought would grow strongly on the back of new business wins.

Netcomm’s revenue for the full year is still expected to be up strongly and the company forecast that FY2017 earnings should be up due to increased demand for wireless services and the increased roll out of the Ericsson/nbn wireless projects.

Another up-and-coming technology share involved in the provision of internet services is MNF Group Ltd (ASX: MNF). It’s expecting another year of strong profit growth, despite significant infrastructure investments that bode well for the future. MNF Group shares are not cheap at $3.60 each, but its outlook and founder-led nature makes it a better bet than Netcomm Wireless in my opinion.

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Motley Fool contributor Tom Richardson has no position in any stocks mentioned.

You can find Tom on Twitter @tommyr345

The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.