Bay Networks has posted a 48 per cent increase in sales for its third quarter ended March 31, but profits tumbled by 25 per cent as a result of merger and acquisition charges.
Bay made a $29.2 million profit on sales of $521.7 million, but UK marketing director Graeme Allan denied that the profit drop was caused by a fall in margins. Bay was hit by a $30.5 million charge for the acquisition of Armon Networking and $9.2 million and for that of Performance Technology during the quarter.
In the same period Bay also experienced pent-up demand for modular additions to its System 5000 hub, which Allan said would be eased by product launches slated for this week. Demand for Bay's Model 2800 switch product also fell.
For the first nine months of fiscal 1996 Bay sales increased by 53 per cent to $995.7 million. Profits for the same period were $151.2 million. Europe accounted for around 30 per cent of sales, and the UK accounted for a quarter of European sales.
Bay CEO Andy Ludwick said the quarter had been complicated by multiple product transitions, but he was confident of Bay's near-term product strategy. During Q3 Bay announced high-performance routing and data link switching.
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