Sycamore Beats Expectations
The company reported a net income for the fourth quarter of fiscal 2000 of $18.3 million or 7 cents a share, compared with a loss of $9.1 million or 6 cents for the same period a year ago. This beats analysts' average expectations of 6 cents per diluted share, a figure coming from a poll conducted by First Call.
For the fiscal year, Sycamore reported a $20.4 million net or 8 cents a share, compared with a loss of $19.5 million or 17 cents a share a year ago.
Sycamore also reported quarterly revenue increased to $90.4 million, from $11.3 million last year —- an almost eight-fold increase.
Highlights of the last quarter included Sycamore's proposed acquisition of Sirocco Systems (see Sycamore Gains Access). The deal is expected to become final within the next two weeks, and Sirocco is expected to start generating revenues by the end of the calendar year.
Sycamore says its $420-million deal with 360networks Inc. (NASDAQ: TSIX) also marks an important breakthrough. It's the first commercial shipment of Sycamore’s intelligent SN 16000 switch, which demonstrates that Sycamore has caught up and possibly overtaken the competition in this field (see Sycamore Ships Its Optical Switch).
“We are in the process of expanding the number of trials with existing customers as well as starting new trials with customers,” said Dan Smith, president and CEO of Sycamore, on the earnings conference call.
The big question now is whether Sycamore's biggest existing customer, Williams Communications Group Inc. (NYSE: WCG), will buy the SN 16000. “Williams is still testing the equipment, and they haven’t announced when they will decide about including optical switching in their network,” Smith said yesterday.
Williams already has a $400 million contract with Sycamore and a $200 million contract with Corvis Corp. (Nasdaq: CORV) for long-haul transmission equipment. Corvis is seen as a strong potential competitor to Sycamore in the long run, although, so far, Corvis has only begun making its mark in ultra-long-distance transmission.
-- Marguerite Reardon, senior editor, Light Reading, http://www.lightreading.com