Network firms ride a rollercoaster market

US giant Cisco shows a 30 per cent increase in sales, while Newbridge suffers downturn and issues a profit warning.

The volatility of the networking market has been reflected inewbridge suffers downturn and issues a profit warning. financial figures released this week, as companies experienced results from triumphant to well below expectations.

US giant Cisco Systems reported sales of $1.87 billion for its first fiscal quarter ended 25 October, an increase of 30 per cent on last year's Q1 figure of $1.43 billion. The company also boasted a 26 per cent increase in net income of $416 million, compared to $321 million for the same period last year.

A representative at Cisco said: 'We are pleased with the results but we can't take it for granted.' He added: 'We have been telling the market for three years that it will grow at between 30 and 50 per cent and we want to grow at above that.'

However, Madge Networks announced a loss of 26 per cent for the third quarter ended 30 September, with turnover at $83.5 million down from $112.2 million for the same period in 1996.

Brian McBride, EMEA president at Madge Networks, claimed the figures were in line with market expectations and cited huge company restructuring at a cost of $48 million as one of the main reasons for the fall.

McBride said: 'The third quarter is seasonally weak and we began restructuring in the quarter for that reason.'

Rockwell International's results rose by 12 per cent, with net income of $109 million for its fourth quarter ended 30 September, an increase of $97 million from the same quarter last year.

However, Rockwell warned that its profit growth for 1998 will decrease from an expected 15 per cent to 10 per cent, with profits for the fiscal year falling 11.3 per cent to $622 million from $726 million the previous year.

Newbridge Networks results are due at the end of November, although the company has issued a profit warning that results will fall short of expectations.

Preliminary second quarter estimates, ended 2 November, suggest revenue will be $435 million - almost equal to the first quarter figure.