Galaxy Z Flip 4 Preorder Quest 2: Still the Best Student Internet Discounts Best 55-Inch TV Galaxy Z Fold 4 Preorder Nintendo Switch OLED Review Foldable iPhone? 41% Off 43-Inch Amazon Fire TV
Want CNET to notify you of price drops and the latest stories?
No, thank you

Merger partners' earnings diverge

Networking giant Ascend's quarterly earnings beat analysts' expectations while those of acquisition target Cascade Communications disappoint.

Networking giants and pending merger partners Cascade Communications (CSCC) and Ascend (ASND) both today reported their first quarter results, with one pulling ahead of Wall Street's expectations and one falling behind.

Cascade, which is being acquired by Ascend, reported first-quarter results that fell below analysts' expectations.

Cascade lost $198.3 million, or $2.13 a share, for the period ending March 29, compared with net earnings of $10.4 million, or 11 cents per share, a year ago.

Excluding a one-time $213.1 million acquisition charge for Sahara Networks, the company would have reported net profits of $14.8 million, or 15 cents a share. But that would have been below Wall Street estimates, which anticipate the company would report earnings of 19 cents a share.

Revenues also fell short of expectations, although they rose 61 percent to $90.3 million for the quarter, compared with $56 million a year ago.

The unexpected sluggishness was largely driven by customers' choppy buying patterns and timing of their network expansions. Cascade pointed to a general weakness in the overall industry, rather than a softening in the company's core networking business.

Meanwhile, Cascade's prospective merger partner, Ascend, posted earnings of $35.1 million, or 27 cents a share, up from $19.4 million, or 15 cents a share, a year ago. The company would have posted net profits of $46.3 million, or 36 cents a share, excluding a one-time charge for acquiring InterCon Systems.

That would have exceeded Wall Street's expectations of net profits of 33 cents a share, according to First Call.

Revenues more than doubled to $202.4 million for the quarter ending March 31, up from $92 million a year ago. The company was given a boost during the quarter by sales of its MAX TNT and GRF 400 networking products.

The two companies expect their merger to close during the third quarter. Under the deal, Ascend will swap 0.7 of its common shares for every share of Cascade.

Both companies reported their earnings after the close of market today.

Ascend closed at 46-3/8, down 1-3/8 from yesterday. Cascade, meanwhile, closed at 30-3/8, down 1 from the day before.