Bay Networks is celebrating its final results as an independent company, assuming there are no delays in the merger with Nortel, with fourth-quarter net income of $20.6 million, (#12.6 million) compared to a loss of $118 million (#72 million) last year.
The San Francisco-based company increased its revenues by 13.9% to $618.3 million (#377 million) for the quarter but for the year reported net losses of $34.8 million, (#21 million), despite revenues jumping 15.2% to $2.4 billion (#1.5 billion). Bay blamed acquisition costs, including the $154 million (#94 million) charge on ongoing research and development from its New Oak and Netstation purchases.
"This was an important set of results for Bay as there had been a lot of talk about us being sold because we weren't doing well," said a spokesman for Bay Networks. "I believe these results have taken away any doubts about us as an individual company and also that the merger with Nortel is a positive move for us."
The financial picture is a little murkier for Nortel. Its acquisitions frenzy has left it nursing a net loss of $62 million (#38 million) for its second quarter. Among its purchases in the first half of the year were remote access start-up Aptis and Canadian fixed-broadband wireless developer, Broadband Networks. Revenues increased by 12% to $4.16 billion (#2.5 billion). Nortel's chief executive John Roth said earnings should grow by around 20% in 1998, despite the proposed $9.1 billion (#5.5 billion) takeover of Bay Networks which will hit the next quarter figures.
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