Avici posts improved Q3

Terabit router vendor Avici Systems this week posted third quarter results that improved upon year ago and previous quarter numbers.

Revenue for the quarter ended Sept. 30 was $10.5 million, compared to $7.3 million for the comparable period a year ago – a 44% increase. Sequentially, third quarter revenue was up 7% from the second quarter ended in June.

Net loss for the quarter was $9.1 million, or 75 cents per share, compared to $17.9 million, or $1.44 per share, in the prior year’s third quarter. For the second quarter, Avici recorded a net loss of $11.3 million, or 92 cents per share.

Revenue for the nine-month period was $27.9 million, compared with $25.8 million for the nine months ended Sept. 30, 2002. Net loss for the nine-month period was $33.1 million, or $2.70 per share, compared to a net loss of $50.7 million or $4.07 per share, for the same period last year.

Avici said the third quarter was also its first in which it was cash flow positive.

Avici’s customers include AT&T, Qwest, WilTel and Huawei. AT&T contributed the bulk of the revenue in the third quarter and the only 10% or better revenue contributor.

The vendor provided no guidance going into the fourth quarter but said it is encouraged by carrier upgrade cycles.

Avici’s improved results follow a solid quarter recorded by core router competitor Juniper Networks two weeks ago. Juniper posted third quarter revenue of $172.1 million, a year-over-year increase of 13%. Net income for the third quarter was $7.2 million, or 2 cents per share, compared with a net loss of $88.3 million, or 24 cents per share, in the third quarter of 2002.

Analysts expect Cisco, which reports Nov. 5, to post sequential revenue growth of 3% and earnings either in-line or a penny better than estimates of 15 cents per share. Cisco guided to a 2% to 4% sequential increase in revenue last quarter.