Foundry Soars on Q1
Shares of Foundry Networks Inc. (Nasdaq: FDRY) jumped more than 7 percent today after the company's upbeat earnings report.
Foundry shares were up $1.08 (7.4%) at $15.72 midday. The stock had begun the day up as much as 10 percent.
Foundry isn't reporting full financials, as the company has joined all the cool kids by going through stock-options restatements. (See Options Scandal Singes Foundry.) But the company did report revenues of $135.8 million for its first quarter, which ended March 31, compared with $125.5 million in the previous quarter and $114 million in the first quarter a year ago.
Yesterday's revenue report beat the analyst consensus of $128.4 million tallied by Reuters Research .
In a note issued today, analyst Mark Sue of RBC Capital Markets estimates Foundry's non-GAAP earnings at 14 cents per share. That would beat out Wall Street's estimate of 11 cents per share.
One heartening tidbit was the growth Foundry has seen in its high-end product lines: the core-network NetIron XMR, the NetIron MLX, and the enterprise-based BigIron RX line. Coming off relatively small numbers compared with Foundry's overall business, the high-end routers grew roughly 12 percent over the previous quarter.
"Foundry is making a concerted push back into the carrier segment, which may provide higher rates of growth for the company," Sue wrote, adding that the company "may also be gaining share" from Enterasys Networks Inc. and Extreme Networks Inc. (Nasdaq: EXTR)
At Networld + Interop next month, Foundry plans to debut the XMR and show new high-end versions of the MLX and RX, each capable of running 128 10-Gbit/s Ethernet ports at wire speed. Foundry announced the XMR and the bigger MLX about a year ago. (See Foundry Claims Core Crown and Foundry Unveils Routers.)
For now, Foundry has begun shipping OC12 and OC48 interfaces for the XMR and MLX. "We believe this capability is important in positioning the product in front of large Tier 1-type carrier customers," Prudential Equity Group LLC analyst Inder Singh wrote in a note issued this morning.
Separately, Johnson noted during the call that Foundry settled a patent lawsuit filed by Alcatel -- now Alcatel-Lucent (NYSE: ALU) -- in June 2005. The companies have signed a cross-licensing agreement, following up a similar agreement Foundry signed with Lucent before the Alcatel merger.
Foundry expects to file its real quarterly statements in mid-May.
— Craig Matsumoto, West Coast Editor, Light Reading