Ascend Q1 Profits Match Forecasts
dailynews.yahoo.com
Ascend Q1 Profits Match Forecasts
By Duncan Martell
PALO ALTO, Calif. (Reuters) - Ascend Communications Inc. (Nasdaq:ASND - news), the No. 5 maker of
equipment that links computers, Tuesday reported first-quarter profits that matched analyst forecasts as sales
to Internet service providers and phone companies surged.
The company said after market close that profit before a credit was $84.9 million, or 36 cents a diluted share,
compared with earnings of $52.4 million, or 26 cents, a year ago.
The results matched analyst expectations of 36 cents, according to First Call Corp., which tracks company
earnings.
Pro forma revenue rose 62 percent to $509.4 million from $305.1 million, a figure that accounts for the
acquisition of Stratus Computer Inc.
''The company had continued strong sales to phone companies and (Internet service providers),'' said Paul
Johnson, an analyst at BancBoston Robertson Stephens in New York. He added that sales of equipment that
allows Internet users to dial into ISPs were better than analysts were expecting.
Ascend, due to be acquired by Lucent Technologies Inc. (NYSE:LU - news) by the end of June, is racing with
competitors such as Cisco Systems Inc. (Nasdaq:CSCO - news) and Northern Telecom Ltd (NYSE:NT - news).
to sell next-generation networking gear to service providers such as AT&T Corp. (NYSE:T - news) and others
as networks that carry voice, data and video.
Including a credit to the purchased research and development expense related to its acquisition of Stratus
Computer Inc., Alameda, Calif.-based Ascend had net income of $108.8 million, or 46 cents a share.
On a conference call with analysts, Chief Financial Officer Michael Ashby said the acquisition was on track to
be completed some time in June. Lucent, the largest maker of telecommunications equipment, has agreed to
buy Ascend in a deal that is now worth $22.9 billion.
''We do not see any major issues,'' arising from government regulators or otherwise that could delay the deal,
Ashby said.
''We are extremely pleased with our financial performance this quarter,'' Ashby said, citing ''continued strong
sales into the service provider market,'' which includes Internet providers and phone companies.
This is the last quarter Ascend will report results as an independent company. For the second quarter, Ashby
said the company expected revenues of about $550 million and about 40 cents a share, if it were to report as a
stand-alone firm.
Sales in North America accounted for 73 percent of the quarter's revenues while Europe accounted for 15
percent, the Asia-Pacific region and Japan 8 percent and Latin America 4 percent. Ashby said sales were
particularly strong in the United States and Europe.
''Our results clearly indicate a broad acceptance of the Ascend products within the growing public service
provider market and affirms our momentum in the marketplace,'' said Mory Ejabat, president and chief
executive in a statement.
At the end of the fourth quarter Ascend was the No. 1 provider of remote-access concentrator products used by
Internet service providers for dialup access to the Internet by its customers, the company said, citing market
researchers Cahners In-Stat and Synergy Research,
Before the earnings news, Ascend stock fell $2.69 to close at $97.75 on the Nasdaq. |
