UTStarcom Profits, Revenues Growing
The company is reporting a profit of $39.4 million, or 33 cents a share, for the quarter, compared to a profit of $25.7 million, or 22 cents a share during the year-ago period. UTStarcom's net sales for the quarter were $405.8 million, compared to $231.5 million in net sales reported in the second quarter of 2002. Wall Street analysts were expecting the company to earn 30 cents a share on revenues of $391 million.
The company is also raising its yearly earnings estimates for the second time this year. It now expects revenues for 2003 to be in the range of $1.80 billion to $1.82 billion. It expects revenues for its third quarter to be in the range of $495 million to $505 million, with earnings per share somewhere around 42 or 43 cents a share.
At least one analyst this year has bought into UTStarcom's story over the long term. Pacific Growth Equities Inc.'s Joe Noel raised his 2004 revenue estimates for the company to a whopping $2.5 billion, a number that might end up being conservative if UTStarcom continues growing at such a quick clip.
Noel wrote last month that he expects 24 percent of its total sales to be from wireline equipment, such as DSLAMs, DLCs, and optical transport gear (see UTStarcom Climbs on Estimate Boost).
Now that UTStarcom has shown it's a survivor, it's worth asking what companies UTStarcom may buy as it keeps expanding and trying to win more business outside of China. So far this year, the company has bought 3Com's CommWorks group, an established business; Xebeo, a struggling startup; and RollingStreams, a development stage startup (see 3Com Completes CommWorks Sale and UTStarcom Nabs RollingStreams, Xebeo). It has also started quietly reselling gear from Turin Networks Inc. in an attempt to provide transport switches for U.S. carriers (see UTStarcom Tiptoes Into Transport).
— Phil Harvey, Senior Editor, Light Reading