Tech Industry

Sycamore surpasses 3Q forecasts

Sycamore Networks (Nasdaq: SCMR) beat analyst estimates in the third quarter.

Shortly before market close Thursday, the provider of optical network products reported fiscal third quarter earnings of $11.7 million, or 5 cents per share, excluding special charges. First Call's survey of 10 analysts predicted a profit of 3 cents per share for the quarter ended April 29.

Including amortization related to deferred stock compensation, Sycamore earned $9.4 million, or 4 cents per share.

Third quarter revenue rose to $59.2 million, up 104 percent from $29 million in the second quarter. "Sycamore's financial and operational results for the third quarter exceeded our expectations," said Dan Smith, president and CEO.

Three new customers were picked up in the third quarter, Smith said, during a conference call with analysts. The company now has eight customers overall, although Williams Communications Group (NYSE: WCG) continued to generate the majority of Sycamore's business.

Sycamore expects to add one to two new customers per quarter for the foreseeable future, Smith said.

The company has topped analyst forecasts every quarter since going public last year.

Although the company has grown 50 to 100 percent sequentially since going public, don't expect that in the future, especially as Sycamore's revenue base gets larger, CFO Frances Jewels told analysts.

"We're not predicting we'll grow at historical growth rates," she said during the analyst call.

Sycamore sees growth in line with analysts' current models, which generally predict revenue expanding between 15 and 20 percent sequentially.

Competitors of Sycamore include Lucent (NYSE: LU), Nortel Networks (NYSE: NT) and Ciena (Nasdaq: CIEN), which also reported earnings Thursday.

Shares of Sycamore closed Thursday's regular trading at 92 1/4, up 5 3/4 for the session.>