5/15 SCMR ( loser: $12 dwn $9)Posts Loss, Warns on Revenue
By Tim McLaughlin
BOSTON (Reuters) - Optical networking firm Sycamore Networks Inc. (NasdaqNM:SCMR - news) on Tuesday reported a fiscal third-quarter loss on sharply reduced expectations and warned current fourth-quarter revenue could fall as much as 45 percent amid slowing customer orders.
Sycamore expects fourth-quarter revenue of $50 million to $60 million, compared with $90.4 million in the year-ago quarter, Sycamore Chief Financial Officer Frances Jewels told analysts during a conference call.
A high-flyer a year ago, Sycamore has been smacked by the U.S. economic slowdown, delays in shipping a key optical switch and reliance on a small customer base.
After the market closed, Chelmsford, Massachusetts-based Sycamore reported a third-quarter loss of $46.2 million, or 19 cents a share, excluding amortization of deferred stock compensation, payroll tax on stock option exercises and restructuring costs. That compared with pro-forma profit of $6.8 million, or 2 cents a share, in the year-ago period.
Analysts, on average, were looking for Sycamore to lose 18 cents a share with a loss range of 15 cents to 19 cents a share, according to Thomson Financial/First Call.
Sycamore's net loss in the quarter was $225.1 million, or 94 cents a share, compared with profit of $5.7 million, or 2 cents a share. The firm took a third-quarter charge of $165.8 million mostly due to eliminating 13 percent of its work force and inventory write-downs.
STOCK HAD DROPPED 87 PERCENT OVER PAST YEAR
After cutting earnings and revenue forecasts last month, Sycamore said third-quarter revenue fell 8 percent to $54.2 million, compared with $59.2 million in the year-ago period.
``We believe that the challenges we face are primarily a result of capital spending and macro-economic issues,'' Sycamore Chief Executive Dan Smith said in a statement.
Sycamore's stock has tumbled about 87 percent during the past year as telecommunications carriers spend less on building out their high-speed optical networks.
Sycamore has retreated from earlier estimates that full-year revenue would top $600 million in 2001. Now, the firm estimates revenue of about $384 million for the year.
Sycamore, whose products move voice and data traffic over wavelengths of light, relies on a small number of customers for the bulk of its revenue, namely from Williams Communications Group Inc. (NYSE:WCG - news) and 360networks Inc. (NasdaqNM:TSIX - news).
After the market closed, 360networks said it is scaling back its construction schedule in light of tighter capital markets.
``What they need is new customers,'' WR Hambrecht & Co. analyst Tim Savageaux said.
Sycamore shares closed down 7 cents to $9.32 Tuesday on Nasdaq. The stock is off 75 percent this year, underperforming the nearly 16 percent decline on Nasdaq. |
