US Report: Bay bashes Q4

Network equipment maker Bay Networks met analysts' expectations in its fourth fiscal quarter, returning a profit of $27.6m (£16.8m), or 12 cents a share, on sales of $618m (£368m).

Bay shares advanced 2 1/4 to 34 13/16 ahead of the announcement.

The company said sales of new products contributed more than 55 percent of revenues for the third consecutive quarter, fuelled by its network-switching product line, which grew 87 percent year-over-year. Including special charges related to the acquisitions of Netwave Technologies and Phase2 Networks, Bay pocketed $20.6m (£12.5m), or 9 cents a share, in the quarter. In June, Northern Telecom agreed to acquire Bay Networks for $9.1bn (£5.5bn), in an all-stock transaction. The deal is still pending government approval.

First Call consensus expected Bay to earn 12 cents a share excluding charges. The $618m (£376.8m) in sales represents a 13 percent improvement versus the year-ago period when it lost $118m (£71.95m), or 59 cents a share, on sales of $542m (£330.5m). Last quarter, it lost $144m (£87.8m), or 66 cents a share, on sales of $547m (333.5m).

For the fiscal year, Bay reported record sales of $2.41bn (£1.46bn), a 15 percent jump from the $2.09 billion it sold in fiscal 1997. For the year, it lost $34.8m (£21.21), or 16 cents a share. Excluding charges related to several acquisitions, Bay earned $118m (£71.95m), or 59 cents a share, in the fiscal year. "We had a strong finish to fiscal 1998 as indicated by the 13 percent sequential growth we achieved in the fourth quarter," said chief executive Dave House in a prepared release. "Revenue from North America hit record levels reflecting robust end-user demand. At the same time, channel inventories continue to be at healthy levels."

Bay shares hit a 52-week high of 41 7/8 in October before sliding all the way to 21 3/8 in late April. Fourteen of the 23 institutional investment firms following the stock maintain a "hold" recommendation. Analysts are looking for Bay to earn 96 cents a share in fiscal 1999.

Newsletters

You have been successfully signed up. To sign up for more newsletters or to manage your account, visit the Newsletter Subscription Center.
See All
See All