Newbridge discloses a turnaround in fortune

Newbridge Networks has claimed to have largely solved the supply chain problems it blamed for recent profit warnings, and has turned in a strong fiscal quarter.

The vendor has also made two acquisitions to strengthen its IP strategy, picking up router developer Northchurch Communications and VPN specialist TimeStep.

Turnover for its first quarter ended 1 August, was up 8 per cent over the previous quarter, at C$495m. Profit increased by 50 per cent to C$47m.

According to a company statement, 72 per cent of turnover came from sales of Wan Packet products.

During its previous fiscal year, the telecoms equipment supplier blamed weak order fulfilment processes for profit warnings issued prior to its third and fourth-quarter results. But Newbridge said "closely controlled" operating expenses this quarter had helped it turn in solid results.

Alan Lutz, chief operating officer at Newbridge, said: "We stated that we were going to fix our supply line management issues and, to a large extent, we have. We said we were going to achieve significant growth and we did. We said we were going to control expenditure and margins and we did."

He added the two acquisitions would silence critics who accused Newbridge of missing out on IP. "People have asked why we haven't said anything about IP. Now we've answered their questions."

Analysts said the internet infrastructure acquisitions will help Newbridge compete against Cisco, Lucent and Nortel Networks in the IP service provider market. Michael Howard, analyst at Infonetics Research, added: "Newbridge looked as though it was falling behind. This shows it is still in the game and moving on."

- Newbridge Networks has appointed Eddie Minshull as vice president of alliances and channels for Europe. Previously, Minshull managed Compaq's partner network as field services director, and established its services network, CSN.