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Ascend beats estimates by a cent

The networking equipment firm beats estimates for its third quarter by a cent, exhibiting continued strength in its core service provider business.

Ascend Communications beat Wall Street estimates for its fiscal 1998 third quarter by a cent today, exhibiting continued strength in its core service provider business.

The networking equipment firm posted earnings of $66.1 million or 32 cents a share, compared with profits of $40.1 million or 20 cents a share reported for the same period the previous year. The results represent the fourth straight quarter that Ascend has beaten Street expectations after a brief downturn in its fortunes.

Company sales grew 37 percent year-over-year to $370.3 million, compared with revenue of $270.4 million posted for last year's third quarter. Net income, from a year-over-year perspective, grew 64.7 percent.

The company said interest in software services running on top of its core access switching hardware for service providers helped to drive sales of its equipment for the quarter.

Ascend makes a variety of networking hardware and associated software that runs in the access points and core of many network service provider layouts.

Sequentially, Ascend grew 13.1 percent in revenue and 11.8 percent in income.

In August, Ascend announced the acquisition of Stratus Computer for about $800 million. Charges related to that acquisition will be accounted for in the company's fiscal fourth quarter.