The woeful story of Newbridge Networks Ltd’s acquisition of UB Networks continued, as expected into the company’s third quarter results, which were as dismal as predicted earlier this month. The company took a $127.2m write-off that it attributed to restructuring of its troubled UB Networks unit seeing the company reporting net losses of $144.3m for the quarter ended February 1. As the company warned last month net income per share was down 72% at $0.07 cents before charges, dropping to a loss of $0.68. Newbridge also had a one-time gain of $34m after disposing of its equity position in Broadband Networks Inc. Including the charges and gain Newbridge lost $0.57 a share or $101m in the third quarter. It is Newbridge’s third straight quarter of poor results. And the bad news from the Kanata, Ontario-based telecommunications equipment company looks set to continue. A major portion of the company’s $181m charge in the last quarter came from laying off 282 UB employees. As it released its results the company also revealed that one day after the third quarter ended it eliminated another 150 jobs, raising the prospect of further substantial charges in the current quarter. Compounding the company’s problems, demand sagged for some of its key product lines. Revenues were up just 7.5% at $252.0m over the same period last year with Newbridge saying the expected shortfall came from a sharp drop in sales of its older, highly profitable time division multiplexer (TDM) networking technology. The company also said the decline hit across its three largest international markets partly blaming economic condition is in Asia and Latin America. As the TDM business drops so the company is more dependent on its other high-end lines. It says its WAN packet business – comprising its MainStreetXpress lines – now accounts for 50% of the company’s income. Revenues from the Enterprise LAN Distribution revenues (the UB Networks unit) was down even from the levels it managed last year under Tandem Computers Inc which had been looking to sell the unit for about four years. Newbridge acquired UB Networks Inc in January last year. Figures were converted at 0.7029 Canadian dollars to the US dollar.
