Industry Watch

ewbridge Over Troubled Waters

Newbridge Networks Corp. got itself into trouble last week when it failed to bridge the credibility gap over projected earnings.

The company announced on Aug. 1 that earnings for the first quarter of fiscal 1995 (which ended July 30), would fail to match the 42 to 44 cents per share predicted by analysts, but would exceed the 30 cents per share per share earnings posted for the first quarter of fiscal 1994. The Canadian manufacturer of telecommunications networking equipment, with its American headquarters in Herndon, Va., will release first quarter results on Aug. 23.

While the company said preliminary estimates indicated revenues would exceed the record levels of the final quarter of fiscal 1994, they would be insufficient to outweigh increased expenses.

On the day of Newbridge's announcement, the company's stock lost nearly a third of its NASDAQ value, where it was the most heavily traded issue, falling $13.12 to close at $28.62. The next day, Newbridge's stock suffered a similar fate on the Toronto stock exchange, plunging by 30 percent.

Numerous analysts criticized Newbridge for waiting so long to break the news. The situation -- and investor panic -- was only worsened by the company's decision to make the announcement on a Canadian holiday, allowing company officials to avoid painful and pointed questions for a day.

On Aug. 4, Newbridge reported investors were filing suit in U.S. Federal District Court for violation of federal securities law regarding public statements.

Falling Star

Star Technologies Inc. announced net income dropped 22 percent during the first quarter to $602,000, versus the $776,000 posted one year earlier. Revenue dropped almost 13 percent to $5.9 million compared to $6.8 million last year. The Sterling, Va.-based manufacturer of high-speed computers blamed its poor performance on declining revenue from Pentagon contracts.

Under the Weather

MedImmune Inc. reported a $4.2 million loss in for the second quarter, compared to a $3.4 million net loss a year ago. Revenue increased more than 70 percent to $4 million, versus $2.3 million one year earlier. The Gaithersburg, Md.-based biotech said sales of CytoGam, its drug for kidney transplant patients, grew 67 percent to $3.1 million in the second quarter, up from $1.9 million.


Reader Comments

Please post your comments here. Comments are moderated, so they may not appear immediately after submitting. We will not post comments that we consider abusive or off-topic.

Please type the letters/numbers you see above

What is your e-mail address?

My e-mail address is:

Do you have a password?

Forgot your password? Click here
close

Trending

  • Dive into our Contract Award database

    In an exclusive for WT Insider members, we are collecting all of the contract awards we cover into a database that you can sort by contractor, agency, value and other parameters. You can also download it into a spreadsheet. Our databases track awards back to 2013. Read More

  • Navigating the trends and issues of 2016 Nick Wakeman

    In our latest WT Insider Report, we pull together our best advice, insights and reporting on the trends and issues that will shape the market in 2016 and beyond. Read More

contracts DB

Washington Technology Daily

Sign up for our newsletter.

Terms and Privacy Policy consent

I agree to this site's Privacy Policy.