Ascend Communications has reported fourth-quarter earnings of $US69.8 million, or 31 cents per share, on revenue of $475.9 million, citing strong sales to service providers of next-generation frame relay and ATM (asynchronous transfer mode) backbone products.
The earnings for the quarter, ended December 31, 1998, were 47 per cent higher than the $47.6 million, or 24 cents per share, reported in the same quarter a year ago. Revenues for the recent quarter also were up 63 per cent over the $292.5 million earned a year ago, the company officials said on Tuesday.
The earnings per share of 31 cents for the fourth quarter were exactly what analysts polled by First Call predicted for the networking and communications vendor, which last week announced plans to merge with Lucent Technologies in a transaction valued at about $20 billion. The merger awaits shareholder and regulatory approval.
The figures for the fourth quarter of 1998 exclude a one-time charge of $267 million, representing a write-off of purchased research and development as part of the $822 million acquisition of high-end computer maker Stratus Computer, which was completed during the quarter.
The Carrier Signaling Group of Stratus, meanwhile, provided a boost to revenues for the most recent quarter by posting better than expected sales, Mory Ejabat, president and chief executive officer of Ascend, said.
For the year as a whole, earnings excluding the one-time charge were $247.3 million, or $1.18 per share, on revenue of $1.48 billion. In the previous fiscal year of 1997, the company reported earnings of $211.2 million, or $1.06 per share, on revenue of $1.17 billion.
The day after Ascend and Lucent announced their plans to merge, Ascend shareholders filed at least four lawsuits seeking to challenge the move.
A few days before the proposed merger was divulged publicly, Ascend announced that it would sell its Stratus Enterprise Computer Division to a global investment group called Investcorp for between $100 million and $150 million. Ascend will maintain Stratus' telecommunications-oriented business.