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Banyan revenues still slow

The network service outfit's key customers delayed orders and were skittish about its management changes, it reports.

Network services company Banyan Systems (BNYN) today said first-quarter revenues will continue to be slow because key customers delayed orders and were skittish regarding its management changes.

Banyan expects its revenues to range from $20 million to $21 million, compared with revenues of $29.9 million a year ago. The company has been posting year-to-year declining quarterly revenues for the past three consecutive reporting periods and two back-to-back losing quarters.

The company, meanwhile, expects to report a net loss of $5.5 million, or 32 cents a share, to $6.5 million, or 38 cents a share, when it reports April 21. Last year, the company reported first-quarter net profits of $400,000.

Wall Street had been expecting the company to post first-quarter net earnings of 15 cents a share, according to First Call. Nonetheless, the stock climbed slightly in morning trading over yesterday's close of 1-13/16.

"The stock has slid from 5-1/2 in January to under 2," said Stephen Dube, an analyst with Wasserstein Perella Securities. "Investors [this morning] are playing around, or may be encouraged that they're still around. Some might think they're takeover candidates."

Banyan has undergone a reorganization since November 1996, but still shows signs of being in a transition, Dube said.

"They're still in transition with their product line and I don't know the prospects for recovery," said Dube.

The company, which has also encountered product delays, is also facing competition from Novell and Microsoft in their marketplace, he noted.

Meanwhile, Banyan chief executive and president William Ferry said immediate action is required by the company.

"In light of our expected results, it is clear that we must act swiftly to reduce our overall cost structure and to improve our responsiveness to customers as we deliver standards-based solutions to their networks," said Perry, in a statement.

Ferry joined the company last February, replacing David Mahoney, who had served as CEO and president.