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Sonus Wraps Restructuring But 3Q Earnings Still Down

Sonus Networks Inc. (SONS), the IP equipment maker that late this summer was said to be eyeing Nortel’s carrier VoIP assets, recently reported its third-quarter earnings, to little fanfare.

That’s because the Massachusetts-based company put off its conference call with analysts until Nov. 9; its financials were released on Nov. 5. According to reports, the delay stemmed from C-level executives’ travel schedules.

Sonus saw its income and revenue dwindle in the three months ended Sept. 30. Revenue was down, from $61.6 million in 2008’s third quarter to $56.2 million. Net losses also widened. This time around, losses amounted to $3.4 million, compared to net income of $4.4 million during the second quarter of 2009. In the third quarter of 2008, Sonus lost $20.7 million. That’s about when it started laying off workers.

Richard Nottenburg, president and CEO of Sonus, said the company has finished the restructuring that began in 2008’s second half.

“We continue to focus on investing in new products and service offerings bringing innovative solutions to the market,” he said in a prepared statement.

Investment bank Avian Securities said it is expecting good momentum from Sonus.

“We expect the company will introduce new products and formally announce its entrance into the enterprise session border controller (SBC) market in the next quarter,” the firm said in a Nov. 9 note to clients.

Avian Securities maintained its neutral rating on Sonus ahead of the conference call, which took place late Monday afternoon.

“Our view is Sonus has been aggressive with managing its operating costs and has traction with Tier 1 operators and our channel checks indicate the company is hiring sales individuals focused on the enterprise,” Avian analysts wrote. “However, we believe the company business is dependent on how well it can transition from TDM to IP to IP. Outside some incremental SBC upgrades with existing carriers, we are unable to identify any significant SBC wins.”


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