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Technology Stocks : Newbridge Networks -- Ignore unavailable to you. Want to Upgrade?

To: pat mudge who wrote (4819)	6/3/1998 2:59:00 AM
From: revbill	Respond to of 18016

from the ottawa citizen online Newbridge reports net loss in 1998, but vows turnaround MICHAEL MACDONALD TORONTO (CP) - Newbridge Networks Corp. reported strong fourth-quarter results Tuesday, but the high-tech company's $3 million in net profit wasn't enough to erase hefty losses that heaped up earlier in the year. As a result, the high-profile telecommunications equipment maker reported a net loss of $18.3 million, or 10 cents per share, in fiscal 1998. That compares with a net profit of $156.9 million in 1997. The company moved swiftly to deal with its problems by shaking up management ranks. Replacing Peter Charbonneau as president and chief operating officer is newcomer Alan Lutz, who last worked as a senior vice-president at Compac, one of the world's largest computer makers. Charbonneau was appointed a vice-chairman of Newbridge Networks. "While recognizing the tremendous value in the stability. . . of the senior management team, we also recognize the value in periodically adding to the team," the company said in a statement. Despite a disappointing year, the company managed to meet analysts' expectations for the fourth quarter, earning 18 cents a share when one-time gains and charges are excluded. "Fiscal 1998 was a year of advancement," chief executive Terence Matthews said in a statement. "We faced some challenges during the year; we met these challenges head on." Investors were buoyed by the turnaround in the three months ended April 30. With fourth-quarter revenue climbing to $395 million, up 10 per cent from the previous quarter, traders gave the company's stock a healthy boost. Shares in Newbridge, based in Kanata, Ont., near Ottawa, jumped $1.65 to close at $41.80 Tuesday on the Toronto Stock Exchange. But that price is a long way from the dizzying heights reached last October when Newbridge shares were trading around $95. And fourth-quarter sales were 10 per cent lower than in same period in fiscal 1997. Newbridge, which makes most of its money by selling equipment to telephone companies around the world, ran into trouble in February when it warned that its quarterly margin would drop by 72 per cent when compared with 1997 figures. The company later reported that it lost more than $144 million in the third quarter, mainly because of hefty restructuring charges and writedowns at its troubled UB Networks division in California. UB Networks has suffered from slumping sales since Newbridge bought it for $109 million US in late 1996. Indeed, the division's fourth quarter results were also poor, the company said Tuesday. Analysts have noted that some of Newbridge's products have fallen out of favor with telecommunications companies, such as the company's TDM technology - short for time-division multiplexing. But Newbridge said sales of TDM products, which fell by 32 per cent in the third quarter, bounced back to post a 14 per cent gain in the last quarter. As well, sales of Newbridge's cheaper and more efficient ATM switching technology - short for asynchronous transfer mode - continue to set a record pace. "The ATM market is extremely robust," Matthews said. "Leading telecommunications and Internet service providers are redesigning their networks around ATM." The fourth quarter was the tenth consecutive record quarter for ATM revenue, the company said. Newbridge's total revenue for the fiscal year was $1.6 billion, an increase of 18 per cent compared with fiscal 1997. Earnings for the year, not including one-time gains and charges, were $171 million or 98 cents per share. That was slightly higher than analysts expectations. Excluding one-time charges, net earnings for the fourth quarter were $32 million, less than half the profits recorded in 1997's last quarter. One-time charges in the quarter included $3 million associated with the proposed settlement of a lawsuit that started in 1994 and a charge tied to the amortization of $26 million related to the acquisition of Radnet Ltd. A LOOK AT NEWBRIDGE NETWORKS CORP.: Headquarters: Kanata, Ont., near Ottawa. Employees: 6,353; 2,800 in Kanata. Business: Switching equipment and services for high-speed data transmission and multimedia communications. Customers: World's 200 largest telephone and telecommuniations companies and more than 10,000 corporate customers, government agencies and institutions. What's new: Company reported a net loss of $18.3 million, or 10 cents per share, in fiscal 1998. That compares with a net profit of $156.9 million in 1997. Share price: Newbridge stock climbed $1.65 to close at $41.80 Tuesday on the Toronto Stock Exchange. Price reached a high of $95 last October. 1998 Revenue: $1.6 billion, an increase of 18 per cent compared with fiscal 1997. Pro forma earnings: Excluding one-time gains and charges, 1998 profits were $171 million or 98 cents per share, slightly higher than analysts' expectations. c The Canadian Press, 1998