Cabletron posts $6.3 million loss
The networking firm posts a net loss of $6.3 million, about what analysts had expected, after issuing a surprise warning earlier this month.
The figure was approximately or slightly below what analysts had expected after the company made an unexpected earnings warning earlier this month. Meanwhile, shares in 3Com (COMS) rose as much as 8 percent on speculation that the networking giant will at least match Wall Street's estimates when it reports quarterly earnings tomorrow. 3Com closed today at 35-1/8, up 1-15/16.
Cabletron's quarterly sales fell to $311.5 million from $380.6 million. On March 2 the company said it expected to report within a per-share range of break-even and a "small loss" before charges. At that time, the company's stock fell nearly 15 percent. Today it was trading at 14-15/16, down 1/16.
Cabletron said fourth-quarter results were hurt by a domestic order shortfall, softness in the federal government business, and weakness in the Asia Pacific and Latin American regions. Fourth-quarter charges totaled $257 million, bringing the company's final loss to $263.4 million, compared with a profit of $60.3 million reported in the year-earlier quarter.
For the full year, Cabletron earned $130 million, or 82 cents a share, before charges, down from $261 million, or $1.64 a share, for the previous year. Annual sales fell to $1.38 billion from $1.41 billion.
"I am confident that we are currently building a foundation that will allow Cabletron to achieve its growth objectives, while simultaneously adjusting for market-driven challenges, although I am disappointed with our results for the year," Cabletron chief executive Don Reed said in a statement.
Last week, Bay Networks (BAY) warned that its third-quarter revenues and profits would fall short of expectations, citing weaker-than-anticipated demand for a broad range of products as confusion in the marketplace took hold.