From the Globe And Mail:
Why do they all show different First call estimates ???
This one says CKY failed to deliver 4 cents...
CrossKeys posts shortfall in quarter
But increases revenue nearly 50 per cent
TYLER HAMILTON
Technology Reporter
Thursday, September 23, 1999
CrossKeys Systems Corp. failed to meet analysts' profit expectations in its fiscal 2000 first quarter, but the telecommunications software maker managed to increase revenue by nearly 50 per cent from the previous quarter.
The Kanata, Ont.-based affiliate of Newbridge Networks Corp. had a loss for the quarter ended Aug. 29 of $1.4-million or 7 cents a share, compared with a profit of $1.9-million or 10 cents a year earlier.
The average estimate of three analysts polled by First Call Corp. was a loss of 4 cents.
Revenue was $7.6-million, an improvement from $5.2-million the previous quarter, but significantly short of the $12.1-million it had in the first quarter of fiscal 1999.
"It looks like they made the turn," said Duncan Stewart, a high-tech portfolio manager for Tera Capital Corp. in Toronto, referring to CrossKeys' dismal fourth-quarter revenue. "We still want them to be doing $10-million quarters. Nonetheless, it's an encouraging sign."
Ian McLaren, CrossKeys' chief executive officer and president, said the company's focus in the coming quarters will be on building revenues, by expanding product lines and increasing its number of distribution partners.
"Over all we're quite pleased with the momentum we're starting to gain back," Mr. McLaren said.
He added that costs will rise as the company puts more focus on research and development and on fulfilling its requirement for skilled employees. So far, the company has hired 40 of the 120 new staff it hopes to hire this year.
"It's going to cost us money to get new products in the marketplace," he explained. "Profitability will be in the back end of the year . . . Our focus in the business is revenue growth, and on continuing that strategy for the next couple of quarters."
Observers have criticized the company for having too much reliance on a small number of industry partners, who include CrossKeys' network management software in larger network equipment contracts.
Mr. McLaren said 70 per cent of the company's sales still come from Newbridge, with another 20 per cent coming equally from Houston-based Compaq Computer Corp. and Germany's Siemens AG.
While more partners have been added, such as Nortel Networks Corp., he said the company is in several discussions with large global companies.
"We're confident we'll have an [announcement] on those in the next month."
Analysts say the company has outlined a good strategy, but added this won't likely be reflected in CrossKeys' stock price until it shows stronger revenue growth.
The stock fell 10 cents yesterday to $7 on the Toronto Stock Exchange. |
