Newbridge Reports Lower Sales, Profits; Plans Restructuring
Newbridge Networks on Thursday posted lower-than-expectedearnings and revenue for its second fiscal quarter and
announced a broad restructuring, including layoffs. The
disappointing financial report came as no surprise, as the
struggling network equipment developer issued a profit
warning two weeks ago.
For the quarter ended Oct. 31, the company reported net
earnings of $206.22 million on revenue of $328 million. Per-
share earnings were 8 cents, far below analysts' estimates
of 18 cents or more.
Newbridge put the blame, in part, on sluggish North American
sales, inducing the resignation earlier this week of Giulio
Gianturco, executive VP, North and South America region.
Gianturco's departure follows the resignation of Alan Luft,
president and chief operating officer, who left after
Newbridge issued its earnings warning.
Newbridge said it would cut 10% of its workforce,
restructure operations by outsourcing manufacturing, and
focus product development and sales on the wide area ATM
switches and broadband access devices that make up its most
popular products. In a prepared statement, CEO Terrence
Matthews said the company is "considering all strategic
options" to increase shareholder value, hinting that
Newbridge might be ready to alter its long-held stance
against being acquired by another company.
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