Ascend beats estimates--barely
Amid a climate of uncertainty in the networking industry, Ascend Communications reports first-quarter results that just beat expectations.
Ascend posted net income of $52.4 million, or 26 cents a share, compared with a net loss of $163 million, or 88 cents a share, for the same period a year ago. The loss last year was attributed to charges associated with the company's $3.7 billion merger with Cascade Communications.
Today's earnings results beat analysts' expectations for the quarter by one cent, according to First Call.
Revenues for the quarter were $305.1 million, compared with sales of $292.7 million for the same period last year.
The numbers reflect a 4.3 percent increase in sequential quarterly sales growth and a 10.1 percent increase in sequential income growth.
Ascend's earnings report comes during a tumultuous period in the networking equipment sector. 3Com's (COMS) earnings for its fiscal third quarter ending March 1, for example, came in below expectations, and Cabletron Systems (CS) posted a loss for its recent fiscal fourth quarter. Only Cisco Systems (CSCO) largely has been immune to market fluctuations--so far.
"We are pleased with Ascend's first-quarter financial results, which showed sequential growth in both net sales and net income," Mori Ejabat, Ascend's president and CEO, said in a statement. "North America, in particular, showed strength driven by strong demand for access ports."
Ascend specializes in networking equipment for dial-access and wide area connections. Many of the company's largest customers offer Net access or value-added network services.
Yesterday, NationsBanc Montgomery Securities upgraded Ascend's stock from "hold" to "buy."
Also, Ascend today announced more sales of switching equipment to GTE Internetworking, a provider of Net services with a layout spanning 108 cities in North America. The service provider will purchase 24 additional Ascend switches based on frame relay and ATM (asynchronous transfer mode) technology. GTE Internetworking has made previous investments in Ascend's products.