Redback blows past estimates, appoints new CEO

Despite continued losses, the maker of networking gear surpasses analyst estimates for its second quarter by quadrupling sales.

Despite continued losses, Redback Networks blew past analyst estimates for its second quarter by quadrupling sales.

The maker of networking gear also appointed a new chief executive today.

The company reported a 340 percent increase in sales, to $48.7 million, over the previous year, and a 43 percent growth in sales over the previous quarter. As a result, Redback beat earnings expectations by 6 cents, posting a loss of 5 cents per share excluding acquisition-related costs and stock compensation charges.

Redback was expected to lose 11 cents per share, according to consensus analyst estimates revised yesterday and compiled by First Call/Thomson Financial.

The company, whose stock has risen 27-fold since it went public last year, announced that current chief operating officer and president Vivek Ragavan will replace Dennis Barsema as chief executive at Redback. Barsema will remain vice chairman. Ragavan joined the company when Redback purchased Siara Systems last year.

At the 1 p.m. PT close of regular trading today, Redback shares were down $7.69 to $156.50. The earnings report was issued after the close of regular trading. Redback completed a 2-for-1 stock split in April.

Including acquisition-related costs and charges, Redback posted a net loss of $286.7 million, or $2.41 per share.

Redback announced it would break even in the fourth quarter of this year--a quarter ahead of previous expectations. It also said technology it acquired last year from Siara for $4.3 billion will begin producing revenue in the company's third quarter. Qwest Communications International is among Siara's initial customers.

Executives said Siara would contribute $25 million in sales to the company this fiscal year, up from previous expectations of $15 million.