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Redback posts unexpected profit

Redback Networks, a broadband network equipment maker, tops Wall Street projections by posting an unexpected quarterly profit of 2 cents per share.

    Redback Networks, a broadband network equipment maker, Wednesday topped Wall Street projections by posting an unexpected quarterly profit.

    The company reported a third-quarter pro forma profit of $3.2 million, or 2 cents a share, excluding acquisition- and stock-related charges, compared with a pro forma loss of $569,000, or 1 cent per share, for the same period a year ago.

    "The third quarter was another strong quarter for Redback with the company achieving key milestones in revenue, profitability and new product development," Redback chief executive Vivek Ragavan said.

    Redback was expected to lose 2 cents per share, according to a consensus estimate compiled by First Call/Thomson Financial.

    Quarterly revenue rose to $80.6 million from $20.6 million last year.

    Before pro forma adjustments, the company's net loss was $308.1 million, or $2.50 per share, compared with a net loss of $1.6 million, or 2 cents a share, for the same quarter a year ago.

    Redback makes high-end networking gear for communications carriers and service providers that allows them to more easily provide high-speed connections for consumers and businesses. The company, via its acquisition of Siara Systems, also is branching into fiber-optic equipment for metropolitan area networks.

    The company said it received more than 50 percent of its revenue from new products, including shipments of its new metro optical networking gear, dubbed SmartEdge. Redback also completed its acquisition of Abatis Systems during the quarter, which will expand the company's product line.

    Company executives said Redback added 70 new customers during the quarter.

    Stock in the company closed more than 6 percent lower Wednesday, at $112.56, ahead of the news. Redback shares have been on a roller-coaster path since the company went public in May 1999, having split twice and traded as high as $198.50 and as low as $50.50.

    Analysts expect Redback to post a fourth-quarter profit of 2 cents per share, according to First Call/Thomson Financial.

    Executives believe the company will report fourth-quarter revenue of about $100 million, with 2001 fiscal year revenue growth of about 20 percent per quarter.

    Ragavan said on a conference call with analysts that the company plans to announce a new chief information officer next week.