FDRY ($18-20 ) P/E 40... Beat Expectations, fails to give guidance
By Elinor Mills Abreu
SAN FRANCISCO (Reuters) - Networking company Foundry Networks Inc. (NasdaqNM:FDRY - news) on Wednesday announced second-quarter results at the high end of Wall Street estimates, citing strong corporate sales and the introduction of new products.
Excluding amortization of deferred stock compensation, Foundry posted a profit of $8.3 million, or 7 cents per share. In the year-earlier quarter the San Jose, Calif.-based company posted a profit of $23.9 million, or 19 cents per share.
Including the charge, earnings were $7.5 million, or 6 cents per share, compared to $22.5 million, or 18 cents per share, for the year-earlier quarter, according to the maker of routers and switches that connect computers to networks.
Revenues for the quarter ended June 30 dipped slightly to $88.6 million from $88.8 million a year earlier.
While sales to Internet Service Providers slowed, Foundry increased its sales into the growing corporate market, where large companies and universities are building out their networks, said Bobby Johnson Jr., president. chief executive officer and chairman.
Sixty percent of Foundry's revenues were from sales to corporate and university customers and 40 percent to service providers, down from 65 percent a year ago, Johnson said in a telephone interview.
The company also doubled its international sales, which currently represent 40 percent of revenues, Johnson said. China and Japan were particularly strong, he said.
During the quarter, the company added 300 new customers, including China Telecom.
``It was our tenth straight quarter of profitability, half of our life,'' Johnson said. ``We introduced four new products last quarter, more than we ever have in any single quarter.''
Johnson declined to provide financial guidance for the current quarter.
``Historically the third quarter has been soft on network providers,'' he said. ``The macroeconomic picture is a little bit cloudy with the summer vacation time in Europe and the U.S. economy is not responding to the interest rate cuts as fast as we'd like.''
Analysts on average had expected a second-quarter profit of 5 cents per share, with a range of two cents to 7 cents, according Thomson Financial/First Call.
Shares of Foundry were down 1.96 percent to $18.97 at the close of the day on the Nasdaq stock exchange and were trading at $18.72 after-hours activity on Instinet.
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