Bay Networks Inc.'s new chairman said he expects the No. 3 networking company's earnings to be "flattish" until it straightens out problems involving employees and customers. David House, the former Intel Corp. executive who was hired at the Santa Clara-based company in October, said he's conducting an extensive evaluation inside and outside Bay. Bay had profit from operations of 25 cents in its fiscal first quarter. The company is expected to earn 26 cents in its fiscal second quarter, which ends Dec. 30.