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Avici Boosts Top Line

Avici Systems Inc. (Nasdaq: AVCI; Frankfurt: BVC7) this morning reported a slight uptick in revenues during in the third quarter of 2003, but the company is still losing money and would not provide financial guidance.

Gross revenue for the quarter ended September 30, 2003 was $10.5 million compared to $9.8 million in the previous quarter, a sequential quarterly increase of 7 percent (see AT&T Makes Avici's Quarter). Revenues grew 29 percent sequentially from the first quarter to the second quarter of 2003.

Avici ended the quarter with plenty of cash -- about $60 million -- and no debt. But it is still losing money: Its GAAP net loss was $9.1 million, or $0.75 per share, which included several charges. Excluding these charges and credits, the net loss was $8.7 million, or $0.72 per share.

This is actually an improvement over the previous two quarters. In the second quarter, Avici reported a GAAP net loss of $11.3 million, or $0.92 per share. And in the first quarter, its GAAP net loss was $15.0 million, or $1.21 per share.

Avici's gross margins increased to 63 percent, up from 55 percent at the end of June. This expansion in margins was due to the use of $550,000 worth of excess materials, but chief financial officer Paul Brauneis said he doesn’t expect gross margins to continue at this level. Instead, he predicts they will fall back into the high 50s. The company also reduced its headcount during the quarter, ending with 228 employees, down from 249 in June.

AT&T Corp. (NYSE: T), which was one of three customers to contribute to Avici's product revenues, was once again the only 10-percent customer during the quarter. The carrier also made up the bulk of Avici's revenue, said CEO Steve Kaufman.

Kaufman also said that Avici's partnership with Huawei Technologies Co. Ltd. is moving along nicely, and he expects revenues to ramp up in 2004 (see Avici Joins Huawei for China Push). Avici is currently working on getting its Chinese Ministry of Information Industry (MII) certification, which is a requirement for selling telecom gear in China.

While the company seemed confident about its long-term prospects in the core routing market, it would not provide short-term guidance.

"Regarding future guidance, visibility for Q4 remains limited given end of year purchase cycles and continued industry turbulence so we will not be giving guidance," said Kaufman. "Looking forward to 2004 we are optimistic, and we expect to gain share and grow faster than the 10-15 percent growth rate expected for the core routing market."

The company’s stock was up $0.44 (7.71%) to $6.15 per share in morning trading.

— Marguerite Reardon, Senior Editor, Light Reading

BobbyMax 12/4/2012 | 11:19:24 PM
re: Avici Boosts Top Line Any revenue growth and product demand is purely speculative. The company has not prided any convincing data to back up its claims.
glad2Bgone 12/4/2012 | 11:19:23 PM
re: Avici Boosts Top Line Bobby Max:

all your base are belong to us
Flower 12/4/2012 | 11:19:22 PM
re: Avici Boosts Top Line Can't you guys stop that crap ? You are turning these boards more into mindless dribble than Bobby is doing already. I know to skip and ignore Bobby's post. Now if loads of other clowns like you are gonna post more crap as follow on, I'll be gone soon.

Just stop it, little kiddies.
glad2Bgone 12/4/2012 | 11:19:19 PM
re: Avici Boosts Top Line Flower:

Been nice knowing you - ciao
seen_the_light 12/4/2012 | 11:19:14 PM
re: Avici Boosts Top Line
and a very poor engineer.

especially when you employ 100 of them, call it an "engineering group", being in lousy dinner and pay crap.

might as well move the whole shihtbhang to the mathaland.
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