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

To: Doug who wrote (11690)	6/1/1999 11:44:00 PM
From: Chris Stovin	Read Replies (2) \| Respond to of 18016

Tuesday June 1, 10:17 pm Eastern Time Newbridge reports fourth quarter net loss OTTAWA, June 1 (Reuters) - Newbridge Networks Corp. (Toronto:NNC.TO - news) reported fourth-quarter results on Tuesday in line with an earlier profit warning that had played havoc with the company's share price. The Ottawa-area firm, which produces digital networking gear, posted a fourth-quarter net loss of 11 cents a share versus a profit of 12 cents a share in the year-before quarter. Excluding charges and gains, it posted a per share profit of 12 cents a share against 13 cents in the year-before quarter. The company also said during a conference call with analysts that Newbridge may miss First Call consensus estimates of 19 U.S. cents per share for its first quarter by a few cents. That's due largely to losses from its affiliate CrossKeys Systems Corp. (Toronto:CKY.TO - news) said president Alan Lutz. But he added that he expects Newbridge to hit estimates of 23 U.S. cents a share in the second quarter and 26 U.S. cents a share in the third quarter. The company could beat fourth-quarter estimates of 29 U.S. cents a share by about five U.S. cents he added. Analysts had expected a fourth-quarter profit of 21 U.S. cents a share excluding extraordinaries before the company warned in May it anticipated a profit of 12 to 14 cents U.S. a share. Problems with the firm's supply chain were behind the shortfall, the company said then. During the conference call, Newbridge said it had a prescription to repair its ailing supply chain. ''The root causes were identified and significant progress has been made,'' said Lutz. He added that the most critical changes have already been made. The company's master production schedule has been more closely matched with its operating plan, or what Newbridge expects to sell in each quarter. Newbridge has also stepped up meetings of its production and senior executives to update work schedules and ensure supplies more accurately match orders. Work to better match finished goods with orders is underway, with specialized software to manage that process expected by the end of June. Efforts to simplify the product portfolio will take longer, Lutz said. Newbridge reported other fourth-quarter results in Canadian dollars. Sales were C$457 million in the quarter and profit was C$33 million, or 18 Canadian cents a share, excluding charges and gains. The results, for the period ended May 2, were in line with a May 4 profit warning that sent Newbridge shares into a tailspin. At the time, angry investors shaved the share value by more than a fifth, from C$53.60 to C$41.95, on the Toronto Stock Exchange. One-time gains were related to the initial and secondary public offering of shares of Newbridge affiliate Tundra Semiconductor Corp. Charges reflected one-time costs to streamline operations by cutting development of some mature products and closing some offices. For the year, Newbridge recorded sales of C$1.8 billion and a profit of C$162 million excluding nonrecurring items, or 91 Canadian cents a share. The results were released after the market closed. The stock fell C$1.35 to close at C$40.15 on moderate trading on the TSE. Newbridge has failed to meet analysts' expectations in five of the last eight quarters. ''There's no magic bullet on this,'' said Mark Lucey, managing director at Kearns Capital Ltd. in Toronto of Newbridge's recovery plan. ''Obviously the story continues to unfold,'' he said. ''This company, with its track record, is still in show-me mode.'' ($1=$1.48 Canadian)