Revenues from Avaya’s ongoing operations for the second fiscal quarter were $1.852 billion, an increase of 1.1 percent or $21 million over revenues of $1.831 billion in the year ago quarter.
Despite the slowing U.S. economy, Avaya continues to focus on the enterprise market and deliver on our plan to grow net income and revenues, said Don Peterson, president and CEO, Avaya Inc. In this quarter’s results, we’re pleased that with steady overall revenues compared to the year ago quarter, we were able to show significant revenue growth in multi-service networking, connectivity solutions, messaging, services, and sales outside the United States. We doubled IP port shipments from 18,000 in the first quarter to 36,000 in the second quarter, and we’re also seeing a leveling from the first to the second quarter of 2001 in sales of traditional voice products. We’re continuing to reinvest in the high-growth segments of our market, increasing our investment in R&D and completing our acquisitions of key technology assets from VPNet and Quintus.
For the second fiscal quarter ended March 31, 2001, Avaya reported a net loss of $64 million or a loss of 25 cents per diluted share*, including one-time and start-up expenses of $32 million, after tax ($54 million, pre-tax) associated with its spin-off from Lucent Technologies; $31 million after tax ($31 million, pre-tax) for purchased in-process research and development associated with its acquisition of VPNet Technologies, Inc.; and $79 million, after tax ($134 million, pre-tax) in charges related to the pending outsourcing of certain manufacturing operations to Celestica. These results compare with reported net income of $66 million or 24 cents per diluted share for the same quarter ended March 31, 2000.
Reported revenues for the second quarter in fiscal 2001 were $1.852 billion compared with $1.945 billion in the same period last year.
For the first six months in fiscal 2001, net income from ongoing operations was $129 million or 41 cents per share on a diluted basis*, excluding one-time and start-up expenses associated with the company’s spin-off from Lucent, as well as costs associated with the acquisition of VPNet and the pending outsourcing of certain manufacturing operations to Celestica. This is an increase of $25 million or 24 percent compared to $104 million or 37 cents per diluted share for the first six months in fiscal 2000.
Revenues from ongoing operations for the first six months of fiscal 2001 were $3.637 billion compared to $3.558 billion for the first six months of fiscal 2000, an increase of $79 million or 2.2 percent.
Including one-time and start-up expenses associated with the company’s spin-off from Lucent, as well as costs associated with the acquisition of VPNet and the pending outsourcing of certain manufacturing operations to Celestica, Avaya reported a net loss of $48 million or a loss of 21 cents per share on a diluted basis for the first six months of fiscal 2001, compared with reported net income of $135 million or 48 cents per share on a diluted basis* for the first six months of fiscal 2000.
Reported revenues for the first six months of fiscal 2001 were $3.637 billion, a decrease of $158 million or 4.2 percent compared with reported revenues of $3.795 billion in the same period last year.
Results in this quarter clearly demonstrate the benefits of our restructuring work, said Garry McGuire, chief financial officer, Avaya Inc. In our first fiscal quarter this year we reduced expenses by $100 million sequentially, and in our second quarter we’ve continued those savings, while increasing our gross margins. Our overall revenues were up compared to the year ago quarter, with growth of 72.4 percent in multi-service networking, 21.9 percent in connectivity solutions, 17.9 percent in messaging, 8.8 percent in services and 7.5 percent overall in sales outside the U.S.
We have said previously that we expect to achieve mid-single digit revenue growth and more than double our net income from ongoing operations in 2001, McGuire said. In light of the current U.S. economic slowdown, we are modifying our expectation of mid-single digit revenue growth to a range of two to five percent with no change in guidance for expected net income.
