Alteon Websystems soars on 4Q forecast

Alteon Websystems rocketed up 27 11/16, or 27 percent, to 128 5/8 Tuesday after telling the Street to expect a surprise profit in the fourth quarter.

It also said fourth-quarter sales improved 80 percent from the previous quarter.

Company officials said late Monday that it recorded sales in the neighborhood of $51 million, up from the $28.2 million it posted last quarter.

It also said it will turn a slight profit in the quarter, three quarters ahead of previous expectations.

First Call Corp. consensus was predicting a loss of 1 cent a share in the quarter.

"...We had been estimating only a breakeven quarter and the company is indicating that it has achieved full profitability," said Paul Johnson, an analyst at Robertson Stephens, in a research note. "In fact, Alteon's estimates for top- and bottom-line performance indicate to us that the company may have exceeded our September quarter estimates in the June quarter."

In a prepared release, Alteon said it enjoyed strong growth across all product lines, across all geographies worldwide and across all customer segments, with particular strengths in Web hosters and application service providers.

Web switch revenue grew approximately 90 percent sequentially and it entered the first quarter of fiscal 2001 with the strongest backlog in the history of the company.

Alteon Websystems will report its fourth-quarter results on July 20.

Last quarter, it beat Street estimates when it posted a loss of $1 million, or 3 cents a share, on sales of $28.2 million.

Its shares stormed up to a 52-week high of 138 in December before slumping to a low of 41 in May.

All six analysts following the stock rate it either a "buy" or "strong buy."