Foundry Networks, Inc. (FDRY), a manufacturer of data networking solutions, on Tuesday said fourth quarter profit increased 84% from the year-ago period on higher sales from products segment. The San Jose, California-based company said net income increased to $28.9 million or $0.18 per share from $15.7 million or $0.10 per share in the fourth quarter of 2006. Revenue rose 28.3%.
Fourth quarter results include $13.2 million of non-cash stock-based compensation expense and $54,000 of expenses associated with the stock option investigation and restatement of Foundry's consolidated financial statements.
Excluding these expenses and the related tax effect, non-GAAP net income in the fourth quarter of 2007 was $37.8 million or $0.24 per share. On average, 20 analysts polled by First Call/Thomson Financial expected earnings f $0.23 per share.
Fourth quarter revenues rose to $168.7 million from $132.0 million, exceeding Street view of $166.06 million. Product revenue increased to $144.66 million from $111.38 million, while Service revenues rose to $23.99 million from $20.66 million.
In the latest period, North American commercial revenue represented 48% of total revenue, while sales to Europe, the Middle East and Africa represented 18% of total revenue. Business from Japan increased to 6% of total revenue, while sales from the rest of Asia increased to 9% of total revenue.
Sales to the U.S. Federal Government remained strong, generating 19% of total revenue. Within the service provider market, router revenue grew to 20% of total revenue. Overall, service provider revenue grew to represent 26% of total revenue in the quarter.
The company's cash and marketable securities was $965.7 million in the fourth quarter, compared to $886.43 million at the end of December 31, 2006. Inventories for the same periods were $42.38 million and $34.86 million, respectively. During the quarter, the company spent $45.0 million to buy back 2.3 million shares of the company stock at an average price of $19.96.
For the third quarter, the data equipment maker reported net income of $27.6 million or $0.18 per share, up from $12.2 million or $0.08 per share in the prior year quarter. Revenue increased 34.2% to $159.5 million from $118.8 million in the same quarter of the prior year.
Net income for fiscal 2007 jumped to $81.1 million or $0.52 per share from $38.7 million or $0.26 per share for fiscal 2006. Annual results include $46.0 million of non-cash stock-based compensation expense and $13.3 million of expenses related to the stock option investigation and restatement of Foundry's consolidated financial statements.
Excluding these expenses and the related tax effect, non-GAAP net income in fiscal 2007 was $118.9 million or $0.76 per share. Revenue jumped to $607.2 million from $473.3 million for fiscal 2006. Wall Street expected 2007 earnings of $0.75 per share on revenues of $604.08 million.
Commenting on the results, Bobby Johnson, President and CEO of Foundry Networks, said: "We continued to deliver on our long-term objectives of diversification within our federal government business, increasing our penetration in the service provider market and expanding our share of the enterprise market.
Among others in the industry, Juniper Networks (JNPR) said last week that fourth quarter profit surged 73.1% on 36% rise in revenues. The company reported net income of $122.9 million or $0.22 per share, up from $71.0 million or $0.12 per share in the year earlier quarter. Results included stock based compensation charges. Excluding charges, net income would have been $151.5 million or $0.27 per share versus $112.6 million or $0.19 per share in the year-ago quarter. Net revenues grew 36% to $809.2 million from $595.8 million in the previous year quarter.
Another peer, Cisco Systems Inc. (CSCO) is expected to announce second quarter results on February 6. Street expects earnings of $0.38 per share on revenues of $9.80 billion.
Stock Movement
FDRY closed Tuesday's regular trade at $14.92, up $0.52 or 3.61%, on 5.54 million shares. The stock plunged over 6% or $0.92 in the extended trade and was at $14. For the past year, the stock trended in the range of 1$2.33-$21.86.
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