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Cabletron profits in line
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September 21, 1998: 6:28 p.m. ET
Second quarter net of 9 cents a share highlight importance of strategic shift
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NEW YORK (CNNfn) - Cabletron Systems Inc. on Monday reported second-quarter profits in line with expectations despite increasingly competitive market conditions.
The Rochester, N.H.-based company recorded net income of $14.6 million, or 9 cents a share. Analysts had a consensus estimate of 8 cents, according to First Call.
The profits still represented a 75-percent plunge from year-ago levels, when net income totaled $57.5 million, or 36 cents a share.
Cabletron's revenue totaled $370.6 million -- relatively unchanged from year-ago levels.
The results underscore the importance of Cabletron's strategic shift away from lower margin networking equipment toward sophisticated solutions for value-added resellers that incorporate software as well as switching equipment.
"With the continued transition from older shared-access technologies to next-generation switching, we clearly still have work ahead of us," said Craig Benson, Cabletron's chairman and chief executive.
Cabletron said less than 15 percent of its revenue was generated by older shared media products compared with 70 percent in 1996. Newer switching products accounts for more than 50 percent of total revenue -- the highest ratio among its major competitors which include Cisco System and 3Com.
"Technology shifts are not unusual in this business, but what sets Cabletron apart is our ability to anticipate changing customer requirements," said Benson.
-- from staff and wire reports
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Cabletron
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