SUNNYVALE, Calif. -- Network processor maker MMC Networks Inc. here enjoyed a robust third quarter of fiscal 1999, 4.9 million on record revenues of $23.1 million, an increase of 65% over the third quarter of 1998.
However, the loss of a large chunk of business from IBM Corp. will impact the fourth quarter, the company said today.
"In the third quarter we secured a record number of design wins, representing both tier-one customers and smart startups, said Doug Spreng, president and CEO. "We also formed a partnership with Panasonic and extended our relationship with Mentor Graphics, both of which should lead to a faster time-to-market for our customers.
Revenues for the third quarter were up 20% from the $19.3 million reported in the second quarter of 1999, the company said, and net income of 14 cents a share compared with 12 cents a share sequentially.
For the nine months ended Sept. 30, total revenues were $58.6 million, up 64% from $35.7 million a year ago.
During the quarter, IBM Corp. announced that it was selling its switches and router business to Cisco Systems Inc. IBM represented 23% of MMC Networks' second-quarter revenues, but the decision did not materially affect the third-quarter results.
"Based on recent discussions with IBM, we now believe that fourth quarter fiscal 1999 revenues will be lower than previously announced due to backlog cancellations and negotiations over chip work-in-progress," said Spreng, who projected a 5%-10% sequential decline. MMC had forecasted IBM's business to be about 15% of revenues in fiscal 2000, and now expects this business to be negligible.
"However, based on the large number of design wins achieved outside of IBM, the company continues to expect sequential growth during fiscal 2000 to be in the mid-teens," said Spreng.
Also today, MMC announced that vice president of finance and CFO Uday Bellary will leave the company at the end of October to pursue startup opportunities.