Newbridge Networks (NYSE: NN) said its president and chief operating officer is resigning, adding a new twist as it reported a familiar story Tuesday. "The quarter was a disappointment," said Terence Matthews, chairman and chief executive officer.
You don't often hear that kind of honesty in a press release, but after a record like Newbridge Networks' it's hard to pretend.
The company said preliminary estimates for the second quarter put revenue at $480 million, and earnings at 8 to 10 cents a share. First Call was expecting a profit of 20 cents a share.
The Canadian network equipment maker issued profit warnings in five of its past eight fiscal quarters. The company finally did something right in its first quarter, skipping past estimates on strong revenue. This prompted analysts to go wrong by predicting the company's shares would outperform the broader markets in upcoming months.
Shares closed at 20 3/4 Monday after a rocky descent from highs approaching the 30s in August.
Alan Lutz, the company's president and chief operating officer, will be replaced by Pearse Flynn, who has spearheaded Newbridge's operations in Europe over the past year as the general manager for Europe, Middle East and Africa
"The company has fared much better in Europe, raking in revenue almost 40 percent higher than in the second quarter of fiscal 1999, compared to its flat revenue from North America.
Despite the setbacks, the company said it is trying to leverage its "core strengths," such as WAN (wide area network) packet - switching revenue, which was up 40 percent over last year's quarter, and strong positions in technologies such as ATM+IP switched routing and broadband wireless.
The company also said it is addressing "issues that require attention, primarily sales effectiveness and ability to scale customer-facing resources." Further details will be discussed on the November 18th conference call.