(RTTNews) - Wednesday, Avocent Corp. (AVCT: News ), a network equipment technology provider, reported a decline in third-quarter profit, hurt mainly by a 25% decrease in net sales. Adjusted earnings, however, came in above analysts' expectations, while revenues fells short.

The Huntsville, Alabama-based company reported third quarter net income of $7.05 million or $0.16 per share, down from net income of $11.0 million or $0.24 per share in the same quarter last year.

Operational net income, which includes benefit of certain one-time items, for the quarter was $20.13 million or $0.45 per share, compared to operational net income of $30.44 million or $0.67 per share in the same quarter last year. On average, four analysts polled by Thomson Reuters expected the company to report earnings of $0.41 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales for the quarter was $137.55 million, down 25% from $183.05 million in the comparable quarter last year. Analysts expected revenues of $139.15 million for the quarter.

The decline in revenue was due to ongoing weaker IT spending, particularly for its server-linked products.

Research and development expenses for the quarter declined to $19.55 million from $24.40 million in the previous year quarter. Selling, general and administrative expenses were $52.18 million, down from $60.27 million a year ago.
Gross margin for the quarter was 61.5%, compared to 62.3% in the previous year quarter. Operational gross margin rose to 64.9% from 64.8% in the year ago quarter. Operating income for the quarter declined to $2.25 million form $13.79 million in the same quarter a year ago.

For the quarter, the company had a benefit for income taxes of $4.65 million, compared to provision for income taxes of $3.21 million in the prior year quarter.

For the nine-month period, the company reported net loss of $56.22 million or $1.27 per share, compared to net income of $15.14 million or $0.33 per share in the year ago period. Operational net income for the period was $45.40 million or $1.01 per share, compared to operational net income of $63.29 million or $1.38 per share a year ago. Net sales declined to $392.25 million from $483.63 million in the year ago period.

AVCT last traded at $24.86, on the Nasdaq.

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by RTT Staff Writer

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