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Bay loses big in 3Q
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April 16, 1998: 6:02 p.m. ET
Computer networking company blames weak demand for $144M loss
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NEW YORK (CNNfn) - Computer networking behemoth Bay Networks Inc. Thursday reported a $144 million loss for its fiscal third quarter, a major disappointment for analysts who had expected the company to turn a profit.
The loss amounted to 66 cents a share. First Call estimates forecast a profit of 12 cents a share, based on analysts' consensus.
Year-to-year revenue increased, however. Bay Networks reported revenue of $547 million, a 6.7 percent gain from $513 million a year earlier.
The results include a $154 million charge relating to Bay Networks' acquisitions of New Oak Communications, Inc. and Netstation Corp.
Excluding these charges, pro-forma net income was $9.9 million, or 4 cents a share.
"We are disappointed with these results," said Dave House, chairman, CEO and president of Bay Networks. "The combined effects of weaker demand in the industry segments we serve, seasonality and longer customer purchase-decision cycles all had a greater negative effect on our quarter than we anticipated."
Although House warned that the effects of weak demand and longer purchase cycles will persist in the coming months, he said the company expects sequential revenue growth for the quarter ending in June.
"We are confident that the revenue contribution from the Accelar product family will increase significantly because we will be shipping new models and have greater availability of the product line," House said. "Also, other new products that began shipping during the month of March will contribute to revenue for a full quarter."
House noted that 55 percent of Bay Networks' revenue came from new products that shipped in the preceding 12 months.
Shares of Bay Networks (BAY) fell 1 to 24 at Thursday's close; after-hours trading had been halted. 
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Bay Networks
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