Avici posts improved Q3

Terabit router vendor Avici Systems Inc. this week posted third quarter results that improved upon year ago and previous quarter numbers.

Revenue for the quarter ended Sept. 30 was US$10.5 million, compared to US$7.3 million for the comparable period a year ago - a 44 percent increase. Sequentially, third quarter revenue was up 7 percent from the second quarter ended in June.

Net loss for the quarter was US$9.1 million, or 75 cents per share, compared to US$17.9 million, or US$1.44 per share, in the prior year's third quarter. For the second quarter, Avici recorded a net loss of US$11.3 million, or 92 cents per share.

Revenue for the nine-month period was US$27.9 million, compared with US$25.8 million for the nine months ended Sept. 30, 2002. Net loss for the nine-month period was US$33.1 million, or US$2.70 per share, compared to a net loss of US$50.7 million or US$4.07 per share, for the same period last year.

Avici said the third quarter was also its first in which it was cash flow positive.

Avici's customers include AT&T Corp., Qwest Communications International Inc., WilTel Communications Group, Inc and Huawei Technologies Co. Ltd. AT&T contributed the bulk of the revenue in the third quarter and the only 10 percent or better revenue contributor.

The vendor provided no guidance going into the fourth quarter but said it is encouraged by carrier upgrade cycles.

Avici's improved results follow a solid quarter recorded by core router competitor Juniper Networks Inc. two weeks ago. Juniper posted third quarter revenue of US$172.1 million, a year-over-year increase of 13 percent. Net income for the third quarter was US$7.2 million, or 2 cents per share, compared with a net loss of US$88.3 million, or 24 cents per share, in the third quarter of 2002.

Analysts expect Cisco Systems Inc., which reports Nov. 5, to post sequential revenue growth of 3 percent and earnings either in-line or a penny better than estimates of 15 cents per share. Cisco guided to a 2 percent to 4 percent sequential increase in revenue last quarter.

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