Extreme Networks Financial Chief Sees 4th Quarter Revenue Up Versus 3rd Quarter
By: Peter Loftus, Of DOW JONES NEWSWIRES
Tuesday May 14, 2:14 pm Eastern Time
NEW YORK -(Dow Jones)- Extreme Networks (NasdaqNM: EXTR - News) Inc. (EXTR) Chief Financial Officer Hal Covert said Tuesday he expects the network equipment maker's fiscal fourth- quarter revenuADVERTISEMENT
e to increase from third-quarter levels.
Covert also said the Santa Clara, Calif. , company expects to improve its operating profit in the fourth quarter, compared with the third quarter. He was speaking at the Credit Suisse First Boston Communications Technology Conference in Phoenix .
Covert's comments were consistent with the limited forecast that Extreme had provided in April, when the company reported third-quarter results. For the third quarter ended March 31 , Extreme reported pro forma earnings, excluding various charges and items, of 2 cents a share. Revenue was $111.1 million.
"We do believe we can continue to increase our revenue, from a sequential standpoint," Covert told investors Tuesday.
Last month, Extreme executives declined to provide a specific forecast for the fourth quarter. Chief Executive Gordon Stitt said only that the company would focus on boosting revenue from third-quarter levels, and on improving its operating profit.
Wall Street believes any such increases will be slight. Analysts surveyed by Thomson Financial/First Call expect Extreme to post pro forma earnings of 3 cents a share on $112.9 million in revenue for the fiscal fourth quarter, which ends June 30 .
A year ago, Extreme had pro forma earnings of 1 cent a share on revenue of $ 115.1 million.
Covert said Tuesday that "business in April was actually pretty good for us." But he added that Extreme typically books only 20% of its quarterly revenue in the first month of a quarter. It usually books 30% of revenue in the second month and then 50% in the final month.
"Although we're very happy with April's performance, we have to make sure we continue throughout the quarter," Covert said.
Extreme shares rose $1.46, or 14%, to $11.60 in recent trading. Earlier Tuesday, Thomas Weisel Partners upgraded its rating on Extreme shares to "buy" from "attractive." The firm said it believes Extreme is gaining market share.
Extreme, which sells network gear primarily to corporate customers, suffered through a downturn in the networking industry through much of 2001. Corporate customers and telecommunications firms reduced capital spending on network equipment amid a weakened economy.
But there have been recent signs of stabilization in the network market. Last week, Cisco Systems (NasdaqNM: CSCO - News) Inc. (CSCO) Chief Executive John Chambers predicted a 5% rise in product orders for Cisco's fiscal fourth quarter, and said business conditions among some Cisco customers were improving. Also, Foundry Networks Inc. (FDRY) said its orders had picked up in April. |
