Sycamore Loss Widens, CFO Steps Down

Optical networking vendor disappoints in its fiscal fourth quarter

September 5, 2007

2 Min Read
Sycamore Loss Widens, CFO Steps Down

In its fiscal fourth quarter earnings report today, Sycamore Networks Inc. (Nasdaq: SCMR) posted disappointing sales numbers and a wider net loss, and also announced that its CFO would be resigning to pursue another job opportunity. [Ed. note: Business as usual?] (See Sycamore Reports Q4.)

The optical vendor posted a net loss of $6.1 million, or 2 cents a share, on revenues of $38 million for the quarter ended July 31. That compares with a loss of $3 million, or 1 cent per share, on revenues of $16.3 million for the year-ago quarter.

Sycamore's quarterly revenues more than doubled year-over-year but were not good enough to meet analyst expectations. Wall Street consensus called for sales of $46 million for the quarter.

The company also missed analyst expectations on the earnings front. On a non-GAAP basis, the company reported net income of $5 million, or 2 cents per share for the quarter, against Wall Street estimates of a net gain of 3 cents per share.

For the fiscal year 2007, Sycamore posted a net loss of $13.2 million, or 5 cents a share, on sales of $156 million. That compared with a net gain of $19.4 million, or 7 cents a share, on revenues of $87.4 million during fiscal 2006.

In its earnings release, Sycamore also announced that Richard Gaynor, the company's CFO and VP of finance and administration, would be resigning to pursue another employment opportunity. Gaynor will be stepping down at the end of the month, and Sycamore already has begun a search for his successor.

Gaynor has been CFO since October 2004, when he took over for then-CFO Frances "Hide The" Jewels. Since then, a series of investigations into the company's financials revealed that Jewels deliberately altered stock option grants from 2000 through 2004. (See Sycamore Replaces CFO, Sycamore Stays Listed, and More Rotten Bark From Sycamore.)

Sycamore's most recent earnings report is its first since the company completed the internal investigation into stock option grants made under Jewels. That investigation and a financial audit resulted in the company restating $215.6 million for fiscal years 2000 through 2007.

After its earnings release, shares in Sycamore fell $0.32 (7.92%) to $3.72.

— Ryan Lawler, Reporter, Light Reading

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