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Vendors release financial results

Vendors release financial results

Networking vendor, Enterasys, has announced a 3.8 per cent rise in revenue for its second fiscal quarter for a total of $US108.4 million.

Net loss available to shareholders was $US35.4 million, or $US0.17 per share, due to “an $US8.2 million special charge relating to restructuring costs primarily associated with workforce reductions and a $16.1 million charge for the write-down of certain minority investments”, according to the company.

Managing director for A/NZ, Gary Mitchell, said the vendor had increased business by 50 per cent in the Asia-Pacific region compared to the previous quarter.

“Australia has certainly contributed in line with that [Asia-Pacific] growth and I’m very pleased about that,” he said. “By the end of the next [third] quarter, Australia will have exceeded revenue levels for the past calendar year.”

New N-Series high-end layer 3 switches were credited with 9 per cent of Enterasys global product shipments during the quarter.

Mitchell said the vendor would launch V-Series stackable switches and its XSR router products in Australia later this month.

Fellow networking vendor, Nortel Networks, fared less well and posted a net loss of $US14 million on revenue of $US2.33 billion. Revenue was down 3 per cent from the first quarter of 2003.

For the second quarter of 2002, Nortel recorded a net loss of $US697 million on sales of $US2.77 billion.

Nortel officials said the results were due to continued cautious and deferred spending from service provider and enterprise customers.

On a business unit level, Nortel’s Wireless Networks revenue increased 4 per cent, Enterprise Networks revenue decreased 11 per cent, Wireline Networks revenue decreased 12 per cent and Optical Networks revenue increased 10 per cent compared to the first quarter of 2003.

Compared to the second quarter of 2002, Wireless Networks revenue decreased 12 per cent, Enterprise Networks revenue decreased 14 per cent, Wireline Networks revenue decreased 16 per cent and Optical Networks revenue decreased 27 per cent.

“Enterprise was clearly disappointing,” Nortel CEO, Frank Dunn, said.

Sales of telephony gear to small and mid-size businesses had slowed, and Nortel’s channel was not aggressive enough in creating demand, Dunn said.

Elsewhere, communications equipment vendor, Avaya, announced a profit of $US8 million for its third fiscal quarter on revenue of $US1.07 billion. Its first profitable quarter in two years came on the back of a major customer win with Merrill Lynch & Co.

Avaya chairman and CEO, Donald Peterson, said the Merrill Lynch deal was an example of increasing purchases of IP gear offsetting declining sales of traditional circuit-switched private branch exchange (PBX) hardware for telephony.

A Merrill Lynch spokes­person said the Avaya technology would replace equipment from Cisco Systems, because the company is adopting a global policy to keep redundancy in its networks that isn’t possible with Cisco’s IP networking gear.

Peterson said the most difficult thing he had faced as CEO was growing Avaya revenues.

Services offered by Avaya were by far the most profitable segment of the company, bringing in $US458 million in revenue and $US43 million in profits. In comparison, the sale of hardware and software to enterprises resulted in a $US13 million loss on revenue of $US416 million.


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