Wednesday February 7, 5:52 pm Eastern Time
Extreme Networks maintains fiscal 2001 outlook: CFO
SAN FRANCISCO, Feb 7 (Reuters) - Extreme Networks Inc. (NasdaqNM:EXTR - news) declared on Wednesday that it is holding the fort for now, as its chief financial officer reiterated the networking equipment maker's financial outlook for 2001, one day after networking giant Cisco Systems Inc. (NasdaqNM:CSCO - news) surprised Wall Street with lower earnings and downwardly-revised forecasts.
At a technology investors conference held by Banc of America, Extreme CFO Vito Palermo said the company's strong sales outside of the United States and to big businesses -- rather than telecommunications service providers, who have in recent months reportedly cut their spending dramatically -- would insulate the Santa Clara, Calif., company.
``We're not naive. We know there is a lot of change going on,'' said Palermo. ``But there are no surprises or changes in our guidance.''
``Extreme is a well-positioned company in the IP space,'' said Banc of America analyst, Shaw Wu, who introduced Palermo to the audience of investors and analysts.
Wu, who rates Extreme a ``buy'', said Extreme's ``stock has been unfairly punished.''
Extreme, which makes broadband switches that run on the Ethernet standard for wide area networks, fell 12 percent before the speech during regular trade on Nasdaq to end at $31-3/4.
Stockwatchers attributed the drop to fallout from Cisco Systems' disclosure on Tuesday that it had missed quarterly earnings forecasts for the first time in more than three years, and that revenue growth was slowing for the networking infrastructure giant.
At its last earnings call in late January, Extreme forecast fiscal 2001 revenue of $615 million to $635 million, and 2002 revenue of $950 million to $1 billion.
Extreme had 54 percent of its sales outside of North America in the most recent quarter, Palermo said. About 70 percent of sales go to big corporations, with less than 2 percent to dot-com companies.
``We have no exposure in areas that are soft,'' he said.
Another Cisco rival, Redback Networks Inc. (NasdaqNM:RBAK - news), fell more than 10 percent before recovering to end regular trade on Wednesday down 3 percent to $41-9/16.
Redback, which competes with Cisco in the market for metropolitan optical networking equipment, also did not lower its forecast for fiscal year 2001 at the Banc of America conference. At its last earnings call, Redback forecast 2001 revenue of $735 million with gross margins between 50 percent and 55 percent.
``We don't see the issues that Cisco is facing,'' said Redback's Chief Executive Officer, Vivek Ragavan, on Tuesday at the same Banc of America conference. ``Our visibility is strong.''
biz.yahoo.com
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