Newbridge predicts double profits
By SUSAN TAYLOR, Ottawa Sun
Newbridge Networks Corp. came in, as expected, with
pre-announced estimates for its third quarter and outlined plans
to re-shape the telecommunications equipment firm.
Newbridge reported sales of $451 million and a profit of 64cents
per share, or 43cents US, in its third quarter, ended Jan. 31.
Slow sales in Asia and Latin America for older product lines
were to blame for results that fell 5cents per share behind
analysts' estimates.
"Indeed, we did miss the third quarter," said president Alan Lutz.
"We are not sneaking off in the cover of darkness . . . we're
moving ahead."
Newbridge's profit will double from 1999 to 2000, he said.
The first phase of Newbridge's transformation is complete with
the appointment of Satjiv Chahil as executive vice-president of
global marketing. Chahil, based in Virginia, has more than 25
years of hi-tech marketing experience at IBM, Xerox, Apple and
Sony.
The second phase includes a major expansion of marketing staff
and new incentives for sales staff to push market share.
There are also plans for product expansion, Lutz said.
Newbridge's board of directors approved the strategy today and
will review sales plans in early April.
"The company is now to the point where it knows what it wants
to be when it grows up," Lutz said.
While Newbridge's cash balance grew $168 million in the quarter
to $929 million, Lutz didn't detail any acquisitions.
He did hint Newbridge is close "closing a transaction" that will
rejuvenate its switching line. The product is associated with
asynchronous transfer mode (ATM) technology, but Lutz
wouldn't say more.
"It's no longer correct to say that Newbridge is an ATM
company," he said. "The religion is gone . . . we are a wide area
networking company and we embrace the two primary
standards."
In a related move, a team working on Internet Protocol network
gear will consolidate in the Boston area, where some affiliates are
based.
Lutz had little to say over its lawsuit against WIC Connexus and
Western International Communications. The suit, over a lost
contract, includes breach of contract, negligent misrepresentation
and breach of confidence.
The claim, related to a four-year deal to supply equipment for a
wireless phone network worth $450-$500 million, could be up to
$900 million. The deal was awarded to Cisco this week.
WIC will vigorously defend itself against Newbridge's claims,
said WIC CEO Peter Classon. |
