Sycamore Networks swings to a profit
Sycamore Networks, a maker of optical switches used by communications service providers, said today that it swung to a fiscal third-quarter profit on higher sales and as year-ago results were hurt by the booking of a hefty reserve for contingencies.
Shares of Sycamore rose 27 cents, or 6.6 percent, to $4.35 in premarket activity on the INET electronic exchange.
The company, based in Chelmsford, posted net income of $10.5 million, or 4 cents per share, for the quarter ended April 29, compared to a loss of $12 million, or 4 cents per share, a year ago.
In the year-ago quarter, the company booked a $10.3 million reserve for contingencies associated with disputes and litigation. Excluding stock option expenses, the company posted net income of $12.3 million, or 4 cents per share, for the latest quarter.
Revenue rose 29 percent to $22.9 million from $17.8 million last year.
Analysts surveyed by Thomson Financial expected earnings per share of 3 cents on revenue of $20.3 million. Estimates treat stock option expenses as charges.
Sycamore also said the Securities and Exchange Commission has started a formal investigation into how the company accounted for stock options from 1999 to 2001. The company recently finished an independent investigation into its stock option accounting and restated results from 2000 to 2004 and for the first two quarters of 2005. Sycamore said it is cooperating with the SEC. (AP)
