x

Foundry Faces Tough Times

As earnings season cranks up once again, the first indications of the quarter’s winners and losers are starting to emerge. At this stage, Foundry Networks Inc. (Nasdaq: FDRY) has already sprung a downside suprise.

Last night Foundry announced its preliminary first-quarter results, cutting its revenue forecast from $100-$110 million to $84 million. The company attributed this shortfall to two key factors: a slowdown in U.S. Federal Government orders and worse-than-expected sales to North American enterprise customers (see Foundry Q1 to Fall Short).

The first sign of these problems emerged earlier this year when, despite announcing record annual revenues, Foundry admitted that Federal spending was a sore spot in its fourth-quarter figures. The firm blamed this shortfall on the shifting of budgets to the Iraq war effort (see War Fogs Foundry's Numbers).

Get the full story at NDCF.

— James Rogers, Site Editor, Next-Gen Data Center Forum

Page 1 / 2   >   >>
rjmcmahon 12/5/2012 | 3:19:11 AM
re: Foundry Faces Tough Times Another sad thing. We have so-called economists trained by University of Chicago publishing articles on a web site they call heartland.org proclaiming the reason California is falling behind in broadband is because government is denying SBC ROW permits.

Nowhere do they mention the fact that a modern fiber infrastructure is a natural monopoly nor do they mention that bandwidth abundance is the economic definition of a public good.

Who is training these people?

http://www.heartland.org/Artic...

"Why California Is Falling Behind

Written By: Sonia Arrison
Published In: IT&T News
Publication Date: April 1, 2005
Publisher: The Heartland Institute

A recent California Public Utilities Commission (PUC) report warned the state is falling behind in developing sound policies that will speed the deployment of broadband.

...

Recognizing the Problem

And then thereGÇÖs the GÇ£right of wayGÇ¥ issue.

In order to build broadband infrastructure in California, right-of-way permits are often required by various agencies, including federal, state, local, and even tribal governments. Obtaining the permits can take as little as a few weeks but sometimes months or even years.

Officials in Orange, Riverside, and San Bernardino counties recently took two years to approve permits for SBC. People who complain that providers are taking too long to get broadband service to a particular area should consider the enormous barriers government has created to high-speed rollout. To the credit of the PUC, it has recognized these serious problems."

The CPUC broadband report can be found at

http://www.cpuc.ca.gov/publish...
rjmcmahon 12/5/2012 | 3:19:11 AM
re: Foundry Faces Tough Times Foundry admitted that Federal spending was a sore spot in its fourth-quarter figures. The firm blamed this shortfall on the shifting of budgets to the Iraq war effort.

Isn't this depressing. We are sending off a generation to fight this war while spending our children's money to pay for it. At home we are giving the people FOX and its propaganda, exclaiming everything is "fair and balanced" when it's obviously not.

Now another effect close to our industry. Companies like Foundry which build modern technology and create jobs for the future are being squeezed.

When are we going to start taking these issues seriously? We have to invest in infrastructure which helps solve these problems. Modern communications networks is part of the solution.
light-headed 12/5/2012 | 3:19:10 AM
re: Foundry Faces Tough Times Foundry has survived and prospered over the past few years thanks to our tax dollars (your welcome!). Build-outs don't last forever and you don't have to be a genius to realize that with a HUGE deficit and IMMENSE govt. overspending that the Federal nipple would eventually dry up... THAT day has arrived!

Foundry has no one to blame but themselves for not finding other niches to sell their products, develop new products that customers will buy from them and perhaps use some of that MASSIVE cash pile to acquire technology and sales channels.

Can you hear me Mr. Johnson?

This company has farther to fall still if they do not change their ways...
rjmcmahon 12/5/2012 | 3:19:10 AM
re: Foundry Faces Tough Times You are ready to believe the liars that run the company of the reason that their product sales were not strong? Could have just as easily have been that the buildout they were in finished and this was a convenient thing to say.

Could be. I don't have any data to refute it either way. I am taking CEO Johnson's words at face value.

"Money is being redirected to bombs and bullets as opposed to infrastructure."
paolo.franzoi 12/5/2012 | 3:19:10 AM
re: Foundry Faces Tough Times
So wait a minute.

You are ready to believe the liars that run the company of the reason that their product sales were not strong? Could have just as easily have been that the buildout they were in finished and this was a convenient thing to say.

Yep, and in a documentary that showed the reporters from the major news networks covering Bush in his 2000 campaign to a person loathed him and his ideas created a fair network? So, it is okay for one side to propel it's crap into the ether but not the other?

seven
laserbrain2 12/5/2012 | 3:19:09 AM
re: Foundry Faces Tough Times Could be. I don't have any data to refute it either way. I am taking CEO Johnson's words at face value.

"Money is being redirected to bombs and bullets as opposed to infrastructure."


Bobby is delusional. Should have been, "Money is being redirected to Cisco and F5 as opposed to us."
DocGonzo 12/5/2012 | 3:19:07 AM
re: Foundry Faces Tough Times Have you all forgotten that Foundry will soon be etching their name in the Great Core Routing Market Share Round-up?!? According to LR, they just recently launched their second foray into the *lucrative* backbone router space with an impressive product launch. Clearly this initiative will bear fruit soon and exceed the downside of this gov't spending shortfall.

We shall overcome...

Doc
douggreen 12/5/2012 | 3:19:05 AM
re: Foundry Faces Tough Times Yes, this earnings fiasco does explain why Foundry would announce their entry into the core router market in spite of the facts that:

1.They gave no information on how they accomplished what took Juniper and Cisco years and hundreds of people (on the sofware side) seemingly without much investment on their part.
2.In spite of the fact that the system is "ready" to ship, they had no customer trials, comments, or other customer validation. In fact, the only quotes in their announcements were from people inside the company.

This explains everything.

BlueWater66 12/5/2012 | 3:19:04 AM
re: Foundry Faces Tough Times As an aside, has anyone made money in core routers? I feel sorry for Avici. Cisco took forever to get the CRS1 off the ground (and certainly hasn't yet recovered development dollars). Juniper had numerous issues rolling out the multi-shelf version of the T640. And Chiaro isn't exactly printing money (but I like them, at least they've got spirit).

Good luck Foundry. The core moves at the speed of a glacier. It won't lift their near-term revenue or profits... but they'll have to provide some really expensive evaluation shelves for 24 months of painful, probing evaluations.
ChatEnChapeau 12/5/2012 | 3:18:59 AM
re: Foundry Faces Tough Times RJ,

Agree with most of what you said, but...

"Companies like Foundry which build modern technology and create jobs for the future are being squeezed."

Modern? C'mon now :-) (Duck - the Foundlings are going to attack).

C-en-C
Page 1 / 2   >   >>
HOME
Sign In
SEARCH
CLOSE
MORE
CLOSE