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August 11, 1997updated 01 Sep 2016 6:14pm

NEWBRIDGE ISSUES PROFIT WARNING AFTER FLAGGING SALES AT UB

By CBR Staff Writer

Newbridge Networks Corp is having a harder time digesting its UB Networks acquisition that expected. The company has issued a profits warning for its first quarter – the first to include revenues from the UB Networks business. Newbridge told analysts that revenues for the three months to August 3 will be $435m, up 52% from $286m in first-quarter 1997 but down from the $441m during the company’s 1997’s fourth quarter. The company said that will bring net earnings for the first quarter of fiscal 1998 to within 5% of earnings for the fourth quarter of 1997, which were $0.38 a share. The final results for the first quarter will be made public on August 19. The problem looks to be weaker-than- expected sales of products made by UB Networks, the California networking firm Newbridge bought at the turn of the year. According to the company, the enterprise networking product revenues, comprising revenue from the Vivid switched routing system and the former UB Networks products, were approximately $38m lower than the previous quarter. The company gave three reasons for the failure of its enterprise unit to match its expectations. Firstly, sales of shared media hubs were below expectations, a reflection of softness in the overall market; secondly, the companies continued attempt to kill off the lower margin UB Networks OEM products and thirdly sales of the new Vivid MLS 500 switching hub were below expectations.

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