Today's headlines. Morgan Stanley hired to explore Sale...
11/19 16:36 Newbridge Raised to `Speculative Buy' at Dundee Securities
11/19 15:50 Morgan Stanley Hired by Newbridge to Explore Sale, Alternatives
11/19 15:30 Newbridge Networks Maintained `Speculative Strong Buy' at CIBC
11/19 14:19 Newbridge Network Maintained `Buy' at Griffiths McBurney
11/19 11:04 Newbridge Network Maintained Near-Term `Neutral' at Merrill
11/19 10:33 U.S. Equity Movers: Emulex, MiniMed, Newbridge, Nike, Polycom
11/19 9:59 Newbridge Networks Corp. Reiterated `Buy' at Robertson Stephens
11/19 9:51 Newbridge Networks Corp. Reiterated `Buy' at Gerard Klauer
11/19 9:48 Newbridge Networks Maintained `Underperform' at RBC Dominion
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Morgan Stanley Hired by Newbridge to Explore Sale, Alternatives
Kanata, Ontario, Nov. 19 (Bloomberg) -- Morgan Stanley Dean
Witter & Co. was hired by Newbridge Networks Corp. to explore a sale and other alternatives after the Canadian phone-equipment maker reported a 55 percent drop in fiscal second-quarter profit, a person familiar with the situation said.
Newbridge shares fell 2 9/16 to 21 7/16, erasing some of the
27 percent gain recorded yesterday after it said it's firing
about 700 people, or 10 percent of its workforce, and hired an unidentified investment bank to work on a possible sale. Morgan Stanley declined to comment on whether it had been hired; Newbridge officials weren't available.
Newbridge is struggling to boost profit as it loses U.S.
sales of switches that handle voice, data and video on a single network to Lucent Technologies Inc., the No. 1 phone-equipment maker. North American sales in the second quarter were unchanged from the first.
Speculation that Newbridge could put itself up for sale had
grown after a Nov. 2 profit warning, the company's third in four quarters.
Among companies mentioned as possible suitors are Ericsson
AB, Nokia Oyj, Tellabs Inc. and Cisco Systems Inc. Earlier this week, Alcatel SA said it had no plans to make a bid.
Chief Financial Officer Ken Wigglesworth said a bank will
help Newbridge decide whether to sell the entire company, sell part of the business or seek partnerships with other companies that could help boost sales and profit.
Profit Drops
Newbridge late yesterday said profit from operations for the
quarter ended Oct. 31 dropped to C$21.5 million (US$14.7
million), or 8 U.S. cents a share, from $C48.2 million, or 18 U.S. cents, a year earlier. The company warned two weeks ago that profit would be 8 U.S. cents to 10 U.S. cents a share, half of what it had led analysts to expect.
Pearse Flynn, who was promoted to president two weeks ago,
said the company is failing to meet profit and sales expectations because it hasn't got more advanced products on the market, its U.S. sales are weak and its costs are too high for the industry.
Lucent beat out Newbridge for sales because it gained a
faster asynchronous transfer mode, or ATM, switch with its
acquisition of Ascend Communications Inc. in June, Newbridge said after its most recent profit warning. |
