Good news is a stranger right now to networking software maker Banyan Systems (BNYN)
The supplier of networking software today reported a wider-than-expected
second-quarter loss and plummeting revenues.
Banyan reported a loss of $13.7 million, or 79 cents a share, for the
quarter ending June 30, compared with net profits of $186,000, or 1 cent a
share, a year ago. Excluding a $9.7 million second-quarter
restructuring charge, Banyan would have reported a net loss of roughly $4
million, or 23 cents a share.
A consensus analyst estimate from First
Call pegged Banyan's loss at 20 cents per share. Shares of Banyan
dipped in morning trading.
Revenues also dropped significantly
year-to-year, falling to $17.1 million from $30.2 million a year ago.
Banyan officials, however, pointed to recent efforts to turn around the
struggling company. Officials noted a 20 percent reduction in operating
encouraging adoption of new software releases, and lower channel inventory
levels as indicators that the company is headed in the right direction
under new chief executive William Ferry.
And executives have previously stated in interviews that the internal goal
for the company is to complete a quarter in the black before the end of the
But industry observers wonder how long Banyan can remain a viable player
with companies like Microsoft
focusing on network-based software. Banyan's network operating system,
Vines, has built a reputation as a rock-solid platform. Although users have
raved about Vines, company officials admit that Banyan's future lies in its
StreetTalk directory and tools that ease migration to Microsoft's popular
Windows NT operating system.
"While we are encouraged by our progress, there is much work to be done in
order to stabilize Banyan's business performance and complete the
rebuilding process," said Ferry in a statement.
Some irony accompanies Banyan's woes. Monoliths like Microsoft are
currently trumpeting the "scalability" of their software, while Banyan's
operating system and directory are part of some of the largest networks in
use. But users are increasingly adding NT to Vines-based networks as
Microsoft ramps up work on enterprise-strength features.