Redback Networks Inc. on Wednesday announced that it beat consensus estimates for its fiscal fourth quarter.
The San Jose, Calif., provider of advanced networking systems announced that it lost 20 cents per share on a pro forma basis, and 67 cents per share using generally accepted accounting principles, which include charges such as Redbacks write down of goodwill this quarter aggregating $2.7 billion. Net revenue for the quarter was $40.2 million.
Analysts surveyed by Thomson Financial/First Call were expecting a fourth quarter pro forma loss per share of 21 cents and revenue of $39 million.
In the previous quarter Redback Networks saw a pro forma loss of 28 cents per share on revenue of $37 million.
"This quarter has given us the confidence that our downward revenue cycle is stabilizing," said Kevin DeNuccio, president and CEO of Redback, in an analyst conference call on Wednesday.
Redback is battling to gain acceptance for its new SmartEdge 800 router in an edge router market dominated by Cisco Systems, Inc.
Redback said before the earnings announcement that it had sold the product to three undisclosed customers and has 15 more testing it for possible purchase.
"Our SmartEdge business remained about 20 percent of the total [business] during the quarter," said Dennis Wolf, Redbacks Chief Financial Officer. "We anticipate the SmartEdge mix will increase, as our new IP service platform is adopted, but as we said before this could take a couple of quarters."
Following on similar remarks from Juniper Networks Inc.s CEO Scott Kriens yesterday, Redbacks DeNuccio felt compelled to address the burning issue of the networking industry right now. "Well be focused exclusively on designing and supporting products for the service provider network," DeNuccio said. "We believe that network intelligence and service provider enablement will reside in the public service provider network, and not in the enterprise."
As to the new year, Redbacks Wolf offered guidance of first quarter revenue being "flat to slightly up." However, he noted it was still "too early to provide any specific guidance."
Reback shares, which closed down 1.5 percent before the announcement, were down 35 cents to $5.51 in after-hours trading.