Sycamore Dodges Cisco Flu
Sycamore Networks Inc. (Nasdaq: SCMR) hasn’t yet succumbed to the Cisco flu. Today, as the company announced earnings for its second fiscal quarter for 2001, Sycamore beat Wall Street’s estimates by a penny, reporting earnings of 6 cents per share (see Sycamore Reports Strong Q2).
Its revenues for Q2 were $149.2 million, a year-over-year increase of 414 percent, beating Wall Street’s estimate of $138.4 million. Its net income for the quarter was $18.1 million (6 cents a share) -- ignoring things like the amortization of deferred stock compensation and payroll tax on exercised stock options. Otherwise, the company actually raked in $13.8 million (5 cents a share).
In anticipation of earnings today, Sycamore shares traded down $0.05 (2.17%) to 22.56. Since this time last year, Sycamore’s stock has dropped 78 percent. Investors were likely jittery, considering Cisco Systems Inc.'s (Nasdaq: CSCO) shocking disappointment earlier this month (see Cisco Misscos!).
The company’s revenue forecasts for the year haven’t changed. On the conference call, Sycamore CFO Frances Jewels said she still expects yearly earnings for 2001 to be between 205 percent and 210 percent (more than $500 million) over fiscal year 2000. She also said the company expects its yearly earnings per share for fiscal 2001 to be between 21 and 24 cents a share.
For the next year, the company says its big breadwinner will still be its SN8000 long-distance optical transport platform, followed by the SN6000, its other big transport offering. Sycamore expects that, by year’s end, its SN16000 core switch will contribute between 10 and 15 percent of the company’s total revenues.
For the second quarter, Sycamore said shipments to Williams Communications Group (NYSE: WCG) accounted for half its quarterly revenues.
As expected, Sycamore CEO Dan Smith did eventually chime in with the obligatory warning about carrier spending and other industry concerns. “Any tightening in capital markets will affect the speed and scope with which service providers adopt our products,” he read gravely from a script. Smith noted that economic uncertainty “restricts” Sycamore’s “short-term visibility” for predicting its customers' spending habits.
In after-hours trading on the Island ECN, Sycamore shares inched up to 23.00 just before the conference call ended.
-- Phil Harvey, senior editor, Light Reading http://www.lightreading.com