Cascade, Ascend ride networking wave
Capitalizing on Internet service provider expansion and growth in the carrier equipment market, Cascade Communications and Ascend Communications report third quarter profits that jumped more than three-fold.
Cascade posted profits of $20.3 million for the quarter ending September 28, up from $6.8 million for the same period a year ago. Revenues jumped to $94.2 million in the quarter from $36 million last year.
Ascend, meanwhile, saw its net profits soar to $24.9 million for the quarter ending September 30, compared with $6.4 million a year earlier. The company's revenues climbed to $154.6 million in the quarter, up from $40.9 million a year ago.
"Both companies saw a strong growth in the carrier equipment market," said Neil Danzger, analyst with Morgan Stanley. "This in turn is driven by heightened bandwidth requirements by users. And that's driven by graphical applications that require more throughput."
Cascade, a provider of wide area network frame relay, asynchronous transfer mode, and remote access equipment, focuses on enterprise-class switching products for Internet service providers and carriers. The company only recently entered the remote access market with the AX family of switches.
Ascend, a provider of remote networking solutions for corporations' sites and ISPs, acquired Subspace Communications and its Netwarp product line during the quarter.
Danzger noted, however, there were some subtle differences in each of the companies' growth. "Ascend's growth is more closely tied to strong Internet activity growth, while Cascade is primarily benefiting from its frame-relay service," he said.