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Cabletron shares dip despite 1Q success

Shares of Cabletron Systems Inc. (NYSE: CS) fell 9/16, or 4 percent, to 14 3/16 Tuesday, one day after the network-equipment maker topped analysts' estimates in its first quarter.

Cabletron raked made $7.3 million, or 4 cents a share, on sales of $349.5 million in the quarter.

First Call consensus expected the network-equipment maker to earn 1 cent a share.

Paul Johnson, an analyst at BancBoston Robertson Stephens, reiterated his "buy" rating on the stock.

"We are reiterating our "buy" rating on Cabletron Systems," Johnson said in a research note. "The company reported its first quarter results beating our expectations, with an operating profit of $0.04 per share versus our estimates of ($0.03) per share. We are raising our fiscal 2000 revenue and earnings per share estimates to reflect the solid quarter and continue to be impressed with management's focus."

Last quarter, Cabletron Systems earned $2.5 million, or 1 cent a share, on sales of $345 million.

"I am very pleased to announce our continued growth in operating income through increased sales and continued cost controls efforts," said CEO Piyush Patel in a prepared release.

Patel took over for Craig Benson, Cabletron co-founder. Benson stepped down earlier this month.

Cabletron shares moved up to a 52-week high of 16 5/16 earlier this month on reports that it might consider spinning off or selling some of its business units.

Thirteen of the 21 analysts following the stock maintain a "hold" recommendation on the stock while two others call it a "sell."

First Call consensus expects Cabletron to earn 35 cents a share in the fiscal year.

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