Cabletron has been forced to warn of charges and a fall in revenue inectivity unit. Dearbail Jordan reports. its latest financials, in the aftermath of its acquisition of Digital's network products business.
Sales for the fourth fiscal quarter ending 30 March are expected to reach between $305 million and z320 million, a drop from $380.6 million for the same period last year. A representative at Cabletron said: 'Don Reed (Cabletron CEO) is very concerned about revenue.'
However, he attributed the fall in figures to a transition from shared access technology to switching. He said: 'Part of the initiative with the reseller was to move to switching but there was a lot of the older products in the channel returned.'
The Q4 figures also revealed a drop on sales of $331.8 million from the third quarter ended 30 November. The New Hampshire-based vendor expected to sustain a z335 million pre-tax charge for ongoing research and development related to the closing of the Digital network business.
A Cabletron representative said: 'All assets that have been debted are those that were either being developed or about to be released.
It is positive but we needed to write it off.'
A further $55 million charge was attributed to expenses incurred during the closing of the Digital business acquired by Cabletron in November last year for $430 million (PC Dealer, 26 November 1997).
An expected figure for income was not included although the company had expected to break even or sustain a loss before including non-recurring charges.
A charge for z30 million also exposed Cabletron's struggle with realignment after it announced 600 lay offs in December last year.
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