Hayes falls short, reports loss
Hayes reports a larger-than-expected loss, citing industrywide softness in the modem market.
Hayes, the company created through the December merger of Hayes Microcomputer Products and Access Beyond, reported a net loss of $3.4 million, or 20 cents a share, excluding preferred stock dividends, compared with a loss of $5.4 million, or 69 cents per share, reported for the same period in 1997.
Analysts were expecting the Norcross, Georgia-based company to post a loss of 12 cents a share, according to First Call.
Net sales for the first fiscal quarter ending April 4 came in at $44.2 million, up 13 percent from the $39.2 million reported for the corresponding quarter of 1997.
"While we were not immune to the industry-wide core modem market softness, including modem sales in Asia, we believe the softness in our Asian business bottomed out in the first quarter and should begin recovery during the second quarter," Ron Howard, Hayes' vice chairman and chief executive officer, said in a statement.
Hayes said it expects the new v.90 modem standard to spur upgrades of modem technology to higher-priced, higher-margin 56 kbps v.90 products, vs. 33.6 kbps modems, and expects to see continued revenue growth from the OEM market.
Hayes also announced today a long-term strategic relationship with Bay Networks that will focus on the manufacture, marketing, distribution, and sales of cable modem products.
The modem maker also launched a national retail distribution strategy with Computer City for cable modems, to initially serve the needs of Prestige Cable.
Later this week, the company will unveil and announce, at Networld+Interop '98 in Las Vegas, a new class of low-priced V.90 access servers.
Hayes said it made progress during the first quarter in preparing ADSL products for release to Alcatel in the second quarter. Volume shipments to Alcatel are scheduled to begin in June.
The company makes analog, digital, and cable modems, as well as remote access servers and ISDN terminal adapters.