Redback meets estimates

Redback Networks matched analyst estimates for the first quarter 2002 but saw revenues down 55% year over year.

For the quarter ending March 31, Redback posted net revenue of $40.6 million, down from $90.9 million a year ago but up from $40.2 million the previous quarter. Net loss for the quarter was $23 cents per share. Pro forma loss was 19 cents per share, in line with the consensus analyst estimate on First Call, and one cent better sequentially.

The company’s broadband subscriber management system line dominated the quarter, accounting for 80% of the company’s business.

And the company expects sales of this line to improve later in the year, as RBOCs expand their DSL infrastructure.

With regard to DSL, most of RBOCs have announced 75% to 100% growth,” said Redback’s Chief Financial Officer, Dennis Wolf. “By the back half of the year, they’re going to have to expand their networks to hit their subscriber targets.”

The next quarter, though, the company expects revenue to be flat to slightly up, sequentially. But by the end of the year, Redback expects to reach cash flow break-even.

“In order to get to cash flow breakeven, we anticipate that we need somewhere between $60 and $65 million in revenue,” said Wolf. “We see that as a Q4 event, which is essentially unchanged from the current consensus.