Cabletron finds local growth amid global trials

Cabletron has announced its local revenue increase for the 1999 fiscal year rose 192 per cent on 1998's results and is planning an aggressive local marketing campaign to counter its flailing international image.

Ian Fewtrell, Cabletron's Australian managing director, said the company is not permitted to release the actual growth figures, but claims the percentage increase should be treated as a sign of continued success in Australia and New Zealand.

"We hit our numbers, we made a profit," Fewtrell commented. "We had our best quarter ever."

Fewtrell said the return on each Australian employee is up 221 per cent this year on 1998 results, and attributed this in part to 27 per cent lower expenses.

The company also landed some significant government and enterprise contracts here recently, which in addition to an increased focus on software development is set to carry the company forward, Fewtrell said.

The local sales and marketing boost is also built around the success of its Spectrum network management tool for the enterprise.

Cabletron's new global initiative, known as Project Ignition, includes the outsourcing of its manufacturing to Celestica. The company reports the project will save it $US80 million each year.

However, the company is still fighting off financial worries and takeover speculation.

Cabletron's US operations recently announced it beat Wall Street expectations with a fourth-quarter loss of $8.3 million, down from $263.4 million lost in the fourth quarter of 1998.

The company reported a net income of one cent per share, compared to an anticipated loss of one cent per share according to First Call.

Net sales for the fourth quarter, ended February 28, 1999, reached $345.1 million, up from $311.5 million in the fourth quarter of fiscal 1998.

Cabletron executives speaking to IDG staff in the US have said that the company might be sold for the right price.

However, local commentators in contact with Network World Today suggest very few IT vendors are interested in buying Cabletron.

In fact, according to IDG reports in February this year, a mid-quarter conference call with company executives failed to persuade some Wall Street analysts that Cabletron isn't fading from view.

Some US analysts believe that Cabletron is not a prime acquisition candidate, and will remain an independent company for some time. However, Cabletron's CEO Craig Benson indicated the company would make a fine acquiree.

"Of the 300 vendors we compete with, we've got the third-highest sales volume," he said. "Somebody is buying our products. I know for a fact that there's interest around Cabletron."

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