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Newbridge Networks misses 2Q estimate, announces layoffs

Newbridge Networks Corp. (Nasdaq: NN) missed analysts' reduced estimates in its second quarter Thursday and announced it would layoff 720 employees. Executives also said it might be in play.

In the quarter, Newbridge earned 8 cents a share, on sales of C$481 million.

First Call consensus expected it to earn 9 cents a share after lowering its estimates from 20 cents a share after the company issued yet another profit warning.

This latest warning was the company's sixth in the past 10 quarters.

"The disappointing results of the quarter compelled us to accelerate the deployment of a comprehensive strategic action plan, which was unanimously approved today by the company's board of directors," said CEO Terence Matthews in a prepared release. "The principal objective is to leverage the power of our industry leading products to create shareholder value. To achieve this objective, we are fully committed to considering all strategic options."

Matthews also said the company might consider putting itself up for sale in the near future.

Ahead of the earnings report, Newbridge shares rallied up 1 15/16 to 20 7/8 on speculation that European telephone equipment makers Ericsson or Alcatel might buy the company.

Last quarter, Newbridge Networks actually beat Street estimates by a couple cents a share, pocketing 18 cents a share on sales of C$495 million.