The upstart network equipment maker posted a fourth-quarter profit of $2 million, or 4 cents a share, compared to a loss of $2.6 million, or 9 cents per share, for the same quarter last year. A consensus of analysts had predicted Redback would earn 4 cents a share, according to First Call.
Fourth-quarter revenue jumped 480 percent to $26.1 million, from $4.5 million last year.
Redback is one of half a dozen networking start-ups that splashed onto Wall Street with successful public offerings this past year. These companies have made strides in light of serious competition from Cisco Systems, Lucent Technologies and others as demand for advanced networks has grown.
Juniper Networks, another network equipment upstart, also announced its first profitable quarter yesterday.
Redback found a niche three years ago by building networking gear that lets service providers offer high-speed cable or digital subscriber line (DSL) access. While analysts consider Redback a market leader, competing networking firms such as Cisco Systems, Nortel Networks, Alcatel and others have recently released similar networking products.
For the 1999 fiscal year, Redback lost $3.9 million, or 11 cents a share, compared with a loss of $9 million, or 34 cents a share the previous year. Yearly revenue, however, jumped from $9.2 million in 1998 to $64.2 million in 1999.
In a conference call with analysts, Redback chief executive Dennis Barsema predicted that company revenue would grow between 10 and 20 percent sequentially next quarter. The company is on track to maintain its edge in the market, he added, despite competition.
"We continue to see the normal cast of characters but I go back to our two-year advantage that we have and the fact that we've been working with our service providers for two years," he said. "That gave us first mover advantage."
In the past quarter, Redback signed on several new service providers to buy equipment, including local phone provider Bell Atlantic and Internet service provider PSINet, company executives said.
Barsema said the integration of Redback's recent purchase of optical builder Siara Systems is going smoothly. The deal is expected to close in March.
"If you look at the people from Siara, 90 percent are in the engineering organization, so most of our focus is integrating (the) teams together," he said. "That has gone well from day one."
Barsema said Siara is on schedule to release beta versions of its products by the end of March, with technology shipping in the third quarter.
Redback plans to integrate technology from both firms in 2001. For example, the company plans to use Siara's chip technology in Redback's Internet access equipment, Barsema said.