EXTR ($21.50 -$26) Q4 revenue higher than expected
LOS ANGELES, July 18 (Reuters) - Internet infrastructure company Extreme Networks Inc. (NasdaqNM:EXTR - news) on Wednesday reported fiscal fourth quarter results at the high end of expectations, but said sales would flatten in the current quarter amid a sustained slowdown in Europe.
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Santa Clara, Calif.-based Extreme, which makes Ethernet switches for networks, reported revenues of $115 million in the quarter ended June 30, up from $112 million in the prior quarter.
Extreme had projected that sales would be flat or decline slightly in April when it also announced it would cut about 10 percent of staff and take the resulting restructuring charges in the June quarter, Chief Executive Gordon Stitt said.
Excluding $12.7 million in charges for that restructuring, and a write down on inventory, Extreme reported pro forma net income of $1.3 million, or 1 cent per share, down from $5 million, or 4 cents a share, a year earlier, but better than the average analyst forecast for a loss of 1 cent per share, according to Thomson Financial/First Call.
In net terms, Extreme posted a loss of $11.4 million, or 10 cents a share, compared with a year-earlier profit of $589,000, or 1 cent a share, on sales sales $92 million.
For the current quarter, sales are likely to be flat or up just slightly from the $115 million recorded in the June quarter, Stitt said, saying that demand would likely remain weak in Europe.
For the fiscal year ending June 2002, Extreme forecast that revenues would grow by 10-11 percent to between $540 million to $545 million from the $491 million recorded in the fiscal year just ended.
By region, sales grew three percent for Extreme in the United States in the June quarter and by 11 percent in Japan, but fell by 19 percent in Europe as the slowdown in investment appeared to spread to that market, Stitt told Reuters.
``I think there is just a sense of uncertainty as we saw in the U.S. from March on,'' he said. ``There's a delay in implementations.''
U.S. sales accounted for 44 percent of Extreme's total revenue, with 20 percent from Europe and 21 percent from Japan in the quarter, a diversification by geography that helped shield the company from the worst of the U.S.-led downturn, he said.
By product line, Extreme saw ``very strong'' growth in its Black Diamond switches --high-end devices used for applications such as linking a computer network between buildings in a corporate campus. Demand for less powerful Alpine and Summit switches had been almost flat in the quarter, Stit said.
Shares of Extreme rose in after-hours trade to $24.26 on Instinet from a Nasdaq close Wednesday of $22.74.
The stock is down about 42 percent since the start of the year in line with a slump in other networking stocks. The American Stock Exchange Internet Infrastructure Index is down about 61 percent over that period. |
