Sycamore: Everybody Hurts

It's official: money doesn't grow on trees. Otherwise Sycamore Networks Inc. (Nasdaq: SCMR) wouldn't continue to report plummeting revenues and widening losses, as it did Tuesday when it reviewed results for its second quarter of fiscal 2002, which ended January 26.

Looking forward, Sycamore CFO Frances Jewels says revenues will be flat-to-down for the coming quarter.

Sycamore's revenues for the quarter were $21.8 million. The company posted a pro forma loss of $27.8 million, or 11 cents a share, a penny better than analysts' expectations.

During the year-ago quarter, Sycamore reported revenues of $149.2 million and a pro forma profit of $18.1 million, or 6 cents a share.

Including one-time charges, Sycamore's actual loss for the second quarter was $35.3 million, or 14 cents a share, versus an actual profit of $13.8 million, or 5 cents a share, for the year-ago period.

For the first six months of 2002, Sycamore's actual net loss was $283.3 million, or $1.13 a share. Last year it only lost $12.4 million or 5 cents a share for the comparable period.

The company's headcount at the quarter's end was 694, down 256 (27 percent) from its October 2001 total of 950 (see Sycamore Enters Crisis Mode).

The company booked revenues from seven customers in the quarter, but a "significant majority" came from two of them. Sycamore also booked more revenue from switches than from services and other products (see Sycamore Spiffs Up Its Switch and Sycamore Lights Up NTT).

The company has $294.1 million in cash and cash equivalents. It expects to burn between $20 million and $25 million next quarter in operations-related costs.

In other news, Kevin Oye, previously Sycamore's VP of business development, is now the company's VP of systems and technology and directs all of Sycamore's product development efforts.

Sycamore's stock closed up $0.03 (0.78%) at $3.87 on Tuesday. The company's shares have lost about 82 percent of their value in the past year.

— Phil Harvey, Senior Editor, Light Reading
http://www.lightreading.com