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Sycamore bears fruit with quarterly profit

The optical switching equipment maker posts its second-straight quarterly profit that exceeded expectations, a sign that the company is beginning to gain strength.

Sycamore Networks, an optical switching equipment maker, today posted its second-straight quarterly profit that exceeded expectations, a sign that the company is beginning to bear fruit.

Sycamore reported fourth-quarter net income of $18.3 million, or 7 cents a share, compared with a loss of $9.1 million, or 6 cents for the same period a year ago. Excluding deferred stock compensation expenses, Sycamore posted a pro forma profit of $20.4 million or 8 cents a share.

Wall Street expected the company would earn 6 cents per diluted share based on a poll of analysts conducted by First Call/Thomson Financial.

Quarterly revenue increased to $90.4 million, from $11.3 million last year.

By posting a profit--for the second straight quarter--Sycamore has separated itself from many others in the red-hot optical networking sector. Some of these new companies still have little revenue--let alone profits--and Corvis, for example, continues to have no revenue despite a $28 billion stock market valuation.

Sycamore, which went public with an explosive stock offering last October, makes high-end products designed to switch traffic within fiber-optic communications networks. The optical sector of the communications equipment market is among the hottest industries in technology as carriers scramble to build new optical Internet networks to carry voice and data at high speeds and low costs.

During the latest quarter, Sycamore signed a $420 million deal to provide 360networks with its gear and agreed to acquire Sirocco Systems in June.

The company, for the year ended July 31, posted pro forma net income of $29.4 million, or 12 cents a share, on revenue of $198.1 million for the 2000 fiscal year. Comparatively, during the 1999 fiscal year, Sycamore had reported a pro forma loss of $16 million, or 14 cents a share, on revenue of $11.3 million.

Sycamore posted its first-ever profit last quarter.

Stock in Sycamore closed more than 1 percent lower ahead of the news today at $158. Shares have traded as high as $199.50 and as low as $47.25. Sycamore has a valuation of more than $38 billion.