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The Cutting Edge | TECHNOLOGY IN BRIEF

Profit Soaring but Cabletron Plans 800 Job Cuts Before Split

March 30, 2000|Bloomberg News

Cabletron Systems Inc. said that profit rose sevenfold in the latest quarter and that it plans to cut as many as 800 jobs, or 18% of the payroll, as it exits older businesses before its planned split into four companies. The networking-equipment maker said profit from operations in its fiscal fourth quarter rose to $28.1 million, or 15 cents a share, from $3.8 million, or 2 cents. Revenue increased 11% to $381.8 million. The results beat analyst estimates by a penny. Cabletron, which has begun to rebound with newer data-traffic routers and services, announced plans last month to split into four units and sell shares in each. Cabletron said it expects to make up some of the job cuts as the new units hire more employees. The company said it's close to selling two businesses: the Digital Equipment Corp. network-equipment business bought in February 1998 for $439.5 million, and switch maker NetVantage, bought in September 1998 for about $77.8 million. Shares of Rochester, N.H.-based Cabletron fell $2.13 to close at $49.88 on the New York Stock Exchange. The company released results after the close of U.S. markets.

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