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Inrange Misses by a Penny

As Inrange Technologies
moves to exit the telecommunications business and focus on storage
networking, the company today reported second-quarter earnings that were in
range with analysts expectations, but missed the consensus by a penny.

The developer of networking and switching equipment had pro forma
earnings of $3.1 million, or 4 cents a share, versus the consensus estimate of
$4.2 million, or 5 cents a share. Revenues were $69 million.

Earnings slid 32 percent from the same quarter a year ago, when Inrange
reported $4.5 million, or 6 cents a share. But revenues grew at a healthy 33
percent over last year’s $52 million. Accounting for much of the discrepancy
was a slide in gross profit margins from 48 percent to 44 percent and a 58
percent rise in selling and administrative expenses.

Including the effects of restructuring, amortizing goodwill, and other
charges related to exiting the telecommunications business, Inrange suffered
a net loss of $5.4 million, or minus 6 cents a share, vs. $4.5 million earnings,
or 6 cents a share, a year ago.

Company officials predict third-quarter earnings of 5 cents to 6 cents a
share on $74 million to $75 million revenues with gross margins similar to
the second quarter. For the year, they expect $300 million total revenues,
including $125 million from open storage products and services.

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