Tech Industry

Redback slides despite strong 3Q results, analyst comments

Redback Networks (Nasdaq: RBAK) tumbled $11.63, or 10 percent, to $101 Thursday despite topping analysts' estimates in its third quarter.

The network-equipment maker posted a pro forma profit of $3.2 million, or 2 cents a share, on sales of $80.6 million.

First Call Corp. consensus expected it to lose 2 cents a share in the quarter.

On Thursday, USB Piper Jaffray upgraded the stock to a "strong buy" rating and raised its fiscal 2000 and fiscal 2001 sales estimates to $263 million and $650 million, respectively.

The $80.6 million in sales marks a 291 percent improvement from the year-ago quarter when it lost $569,000, or 1 cent a share, on sales of $20.6 million.

"Redback achieved some major milestones during the third quarter," said CEO Vivek Ragavan in a prepared release. "The company delivered a profitable quarter and achieved record revenue, with over 50 percent of that revenue coming from new products."

Before pro forma adjustments, Redback lost $308.1 million, or $2.50 a share, in the quarter.

ZDNet News Special Report: 2000 Q3 Earnings

Last quarter, Redback beat the Street when it posted a loss of $5.7 million, or 5 cents a share, on sales of $48.7 million.

Its shares hit a 52-week high of $198.50 in March before plunging to a low of $50.50 in April.

Sixteen of the 17 analysts following the stock rate it either a "buy" or "strong buy."