Xylan 3rd-Qtr Profit Doubles on Strong Direct Sales of Switches
Xylan 3rd-Qtr Profit Doubles on Strong Direct Sales of Switches
Calabasas, California, Oct. 14 (Bloomberg) -- Xylan Corp.'s third-quarter profit more than doubled as the computer- networking company sold more of its powerful switches directly to corporations, offsetting slower sales to large distributors.
Net income rose to $10.4 million, or 22 cents a share, from $4.61 million, or 10 cents, a year earlier. Earnings matched the 22-cent average estimate of analysts polled by First Call Corp.
Revenue surged 70 percent as the Calabasas, California-based company sold more of its switches directly to large businesses, which use them to link computers to corporate networks and the Internet. The increase came even though sales slowed to Alcatel SA and International Business Machines Corp., which account for about a third of Xylan's total revenue. ''It's a positive that they were able to meet expectations despite the (IBM and Alcatel) shortfall,'' said Scott Heritage, an analyst at Warburg Dillon Read, who rates Xylan ''buy.''
Revenue rose to $91.1 million from $53.5 million a year ago.
Xylan rose 1 1/4 to 11 15/16. The shares have fallen 62 percent since July 20, when Xylan officials warned of slowing original equipment manufacturer, or OEM, sales to IBM and Alcatel.
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