Bay reports worse than expected results

Bay Networks' third quarter results are worse than it predicted a few weeks ago.

The company posted losses of $144.2 million on revenues of $547.2 million. Bay had expected revenues of $547.2 million, while analysts were confident it would rake in earnings per share of 12 cents, instead of the actual loss of 66 cents per share.

Bay blamed a $154 million charge on ongoing research and development charges from the acquisition of Extranet access firm, New Oak Communications, and network management vendor, Netsation.

Last year, Bay reported net income of $20.7 million, excluding $32.2 million.

Dave House, chairman and chief executive, said: "We are disappointed with these results. The combined effects of weaker demand in the industry segments we serve, seasonality, and longer customer purchase decision cycles all had a greater negative effect on our quarter."

He said "weaker industry demand" will continue, though, "our enhanced product portfolio gives us a stronger position to meet these challenges".

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