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Sycamore logs 4Q loss
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August 21, 2001: 5:39 p.m. ET
Fiber-optic rout weighs heavily on company's sales and profits
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NEW YORK (CNNfn) - Fiber-optic networking equipment supplier Sycamore Networks Tuesday reported a loss for its fiscal fourth-quarter on sales that fell 40 percent from the same period last year.
And executives of Sycamore said revenue in the current quarter could fall as much as 75 percent below-the year ago levels, as the slowdown in spending among its key customers continues to weigh on results.
Excluding extraordinary charges, the company posted a loss of $29 million, or 12 cents per share for its fiscal fourth-quarter ended July 1. That compares with a pro forma profit of $11.5 million, or 4 cents per share, during the same quarter last year and is in line with Wall Street's expectations, according to a survey conducted by earnings tracker First Call.
Including charges for the amortization of deferred stock compensation, payroll tax on stock option exercises and a provision for "doubtful accounts," Sycamore reported a net loss for the quarter of $42.2 million, or 17 cents per share, compared with a net profit of $7.4 million, or 3 cents per share, in the year-earlier quarter.
The company's revenue for the quarter was $50.9 million, down from $90.4 million during the year-ago period.
Revenue for the quarter was on the low end of the range Sycamore executives had said they were targeting and short of the $52.8 million analysts generally had expected to see on the company's top line, according to the First Call survey.
As have most of its peers in the optical-networking equipment industry, Sycamore's business has been stung by a sharp slowdown in capital spending among telecommunications and Internet service providers who have scaled back their new equipment purchases in the face of a slowing and uncertain economy.
"Over the last several months, the overall slowdown in telecommunications capital spending and a lack of available capital for emerging carriers has impacted our business," Dan Smith, Sycamore's president and CEO, said in a statement.
"During this challenging time, we remain focused on strengthening our customer base, continuing technology innovation, and conserving cash," Smith added.
Looking ahead, Frances Jewels, Sycamore's chief financial officer, told analysts during a teleconference Tuesday evening that the company expects revenue in the current quarter to range between $30 million and $40 million.
Analysts polled by First Call most recently had forecast revenue nearer $56.5 million.
Jewels said she would not provide any financial forecast beyond the first quarter because of, "limited near term visibility." She also expects the firm's first quarter gross margin, the percentage of sales remaining after subtractive product costs, to range between 10 percent and 15 percent.
Sycamore (SCMR: Research, Estimates) shares fell 50 cents to $5 on Nasdaq ahead of the earnings news. They fell another penny in extended-hours trade. 
Reuters contributed to this report
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