Extreme Networks Q1 Adj. Earnings Beat Estimates, Sees Q2 Above View - Update

(RTTNews) - Extreme Networks, Inc. (EXTR) Monday reported a net loss for the first quarter, reflecting lower revenues and a sharp increase in operating expenses. However, adjusted earnings, as well as revenues topped analysts' expectations.

The provider of network infrastructure equipment and services also forecast earnings and revenues for the second quarter above estimates. The shares are up about 16 percent in pre-market trading.

For the first quarter, the company posted a net loss of $35 thousand or breakeven per share, compared to net income of $12.92 million or $0.14 per share in the first quarter of fiscal 2013.

The latest-quarter result included a $3.7 million expense related to Enterasys Networks acquisition, while the prior year result included a $11.5 million one-time gain on the sale of facilities.

On an adjusted basis, earnings for the latest-quarter were $0.06 per share, while the company posted $0.04 per share last year.

On average, three analysts polled by Thomson Reuters expected the company to report earnings of $0.04 per share for the quarter. Analysts' estimates typically exclude special items.

Chuck Berger, president and CEO of the company said, "Extreme's first quarter results were at the high end of guidance on both revenue and earnings per share."

Quarterly net revenue declined to $75.92 million from $76.13 million reported last year. Three analysts estimated revenues of $74.17 million for the quarter.

Gross margin improved to 58 percent from 53 percent a year earlier.

Total operating expenses advanced to $43.34 million from $26.40 million a year earlier. For its second quarter of fiscal 2014, the company expects net loss to be in the range of $0.06 to $0.09 per share, and adjusted net profit in a range of $0.14 to $0.16 per share.

Revenues are expected to be between $140 million and $155 million, with adjusted revenue in a range of $145 million to $160 million. Analysts expect the company to report earnings of $0.06 per share, on revenues of $78.36 million for the second-quarter.

The company stated that the financial targets for the second fiscal quarter reflect the acquisition of Enterasys Networks on October 31, 2013, and will include Enterasys results for the months of November and December.

Further, the firm said Chris Crowell, formerly CEO of Enterasys, has accepted the position of COO and will be directly responsible for sales and marketing.

EXTR closed Friday's regular trading at $5.37. In the pre-market activity, the shares are up 16.07 percent.