Sycamore earnings top estimates by a penny
The young optical switching company reports first-quarter earnings that exceed analyst expectations, sending shares higher in after-hours trading.
Excluding charges, the company's pro forma net earnings for the period ended Oct. 28 were $6 million, or 2 cents per share, on revenues of $120.4 million. That compares with a pro forma net loss of $4.1 million, or 2 cents per share, on revenues of $19.5 million in the same period in fiscal 2000.
Analysts expected Sycamore to earn 1 cent per share, according to a survey by First Call/Thomson Financial.
The solid earnings report may be viewed as a sign of relief by some investors after many optical networking stocks were pounded in recent months. Concerns about the sector escalated last month after Nortel Networks said its sales did not grow as much as analysts had hoped.
At 1 p.m. PST, the close of regular market trading, Sycamore shares were up more than 6 percent to $64.44. The earnings report was issued after the close of regular trading. In after-hours trading, Sycamore shares were up about 15 percent to more than $69.
The company's actual net loss including stock compensation, tax and acquisition costs was $26.2 million, or 11 cents per share, compared with an actual net loss of $7.4 million, or 4 cents a share, for the same period in 2000.
Sycamore executives attributed the better-than-expected report to the strong acceptance of the company's newest optical switching products, two of which were the result of Sycamore's acquisition of Sirocco Systems.
"The fundamental drivers behind Sycamore's growth have remained strong, and our newest product introductions are being favorably received by current and prospective customers," Sycamore chief executive Dan Smith said in a statement.
Sycamore manufactures what it calls "intelligent" optical switches, which route Internet and voice traffic on fiber-optic networks. Sycamore's customers include Williams Communications, 360networks and Enron Communications, among others.
Last quarter, Sycamore also topped analysts' expectations and has now reported a profit for three straight quarters.