Broadband wireless networking systems supplier Ceragon Networks Ltd. (CRNT) on Monday reported a steep decline in third-quarter profit as revenues fell 23% year-over-year. On a per share basis, non-GAAP earnings decreased from last year, but topped the Street view. Following the news, shares of the company are currently up more than 8%.
Third-quarter net income plummeted to $1.08 million or $0.03 per share from $3.48 million or $0.09 per share in the prior year.
On a non-GAAP basis, net income, excluding $0.70 million of equity-based compensation expenses, for the recent quarter fell sharply to $1.77 million or $0.05 per share from $4.24 million or $0.11 per share in the year earlier period. On average, 14 analysts polled by Thomson Reuters expected the company to report profit of $0.03 per share for the quarter. Analysts' estimates typically exclude special items.
Revenues for the third quarter were $44.7 million, down 23% from $58.1 million in the comparable period. Twelve analysts expected revenues of $44.30 million for the quarter.
Also, the company posted a third-quarter operating profit of $0.68 million compared with $3.24 million last year. Income before taxes declined sharply to $1.12 million from $3.73 million in the previous year.
On a GAAP basis, third-quarter gross margin was 31.8% of revenues and non-GAAP gross margin was 31.9% of revenues. Cash and cash investments at the end of the quarter were $99.8 million.
For the nine-month period, the company's net income dipped to $1.53 million or $0.04 per share from $23.24 million or $0.60 per share in the 2008 period. Non-GAAP net income for the nine months ended September 30, 2009 was $3.82 million or $0.11 per share, down from $13.99 million or $0.36 per share in the earlier period. Nine-month revenues dropped to $130.86 million from $160.50 million a year earlier.
Based on continued strong bookings in third quarter, Ceragon Networks said it expects revenue growth to continue into next year, driven by ongoing demand for high capacity backhaul for cellular networks, particularly in the Asia Pacific region.
CRNT is currently up more than 8% and trading at $10.25 on a volume of 197K shares on the Nasdaq.
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