Leading networking company Cabletron Systems (CS) today reported a jump in second-quarter earnings and handily beat analysts' estimates as acceptance of its switching technology appears to be taking hold.
Cabletron reported sales of $371 million, up 9 percent from year-ago figures.
The networking company posted earnings of $57.6 million, or 37 cents a shares, compared with $36.9 million, or 24 cents, a year ago. But the company took a $27.1 million acquisition charge in the most recent quarter, which otherwise would have resulted in earnings of $64 million, or 41 cents a share.
Cabletron beat Wall Street estimates for the quarter of 36 cents per share, according to a First Call.
Shares of Cabletron rose 4 percent to close at 35-1/2, up 1-3/8 over Friday.
Paul Vagaeski, an analyst with Giga Information Group, said the gain could be attributed to the company's specialty in switching technology, now more broadly accepted in the marketplace.
"Cabletron has made headway in articulating the value of their switching architecture. Not just because of their own products, but because all of the big networking companies are saying this is the right way to go," he said.
A long string of record financial growth came to a screeching halt last quarter when Cabletron first had to pre-announce a sales shortfall and then divulged final earnings that had remained flat year after year.
Last month, Cabletron announced that founder, president, and CEO Robert Levine was voluntarily stepping down and would be replaced by Don Reed, a president within Nynex.