|***WEBX ($20~$22) profit quintuples, tax benefit helps|
Tuesday February 3, 5:19 pm ET
SAN FRANCISCO, Feb 3 (Reuters) - WebEx Communications Inc. (NasdaqNM:WEBX - News), a provider of Internet communications services, on Tuesday said its fourth-quarter net profit quintupled from a year ago, aided by a one-time tax benefit.
Net income for the quarter ended Dec. 31 rose to $34.5 million, or 76 cents a share, from $6.9 million, or 16 cents, a year earlier.
Revenue rose to $53.8 million from $40.3 million.
The company recorded a one-time tax benefit of $21.4 million, or 47 cents a share, in the quarter.
Excluding the one-time tax benefit and equity-based compensation expense and assuming a 40 percent tax rate, income for the quarter was 21 cents a share, up 91 percent from 11 cents a year ago, the company said.
Analysts, on average, had been expecting the company to post earnings per share of 17 cents on revenue of $54.8 million.
The San Jose, California-based company forecast first-quarter revenue of $56 million to $58 million and earnings per share of 20 cents to 22 cents.
WebEx raised its fiscal 2004 guidance range to revenue of $235 million to $245 million from prior guidance of $225 million to $240 million. Earnings-per-share guidance was raised to 75 cents to 85 cents from earlier guidance of 60 cents to 75 cents.
Shares of WebEx were trading at $21.25 in after hours, up from a close of $19.90 on the Nasdaq.
years, Cisco has remained the top player in the communications-equipment market, and its numbers are seen as foretelling larger spending trends.
Investors' focus on the networking industry has only grown sharper in 2004, as Cisco's once-forgotten peers -- beaten-down telecom equipment giants such as Nortel (NT:NYSE - news - research) and Lucent (LU:NYSE - news - research) , to name two -- have enjoyed a remarkable resurgence. Shares across the networking sector jumped last month as Wall Street latched onto the notion that big telcos like Verizon (VZ:NYSE - news - research) will soon resume sinking big bucks into network infrastructure.
Further raising the bar for Cisco were comments last month from Scott Kriens, CEO of rival Juniper (JNPR:Nasdaq - news - research) . Following his own company's earnings blowout, Kriens volunteered that the large-router market the companies share is "robust" enough that "Cisco will have a strong quarter." Routers are high-speed junction boxes that help direct Internet traffic.
Cisco's news comes as analysts have begun to wonder if the networking industry's helium-filled bounceback is indeed supported by fundamentals. Some observers suspect that the real winners in this race will be companies such as Cisco and Juniper that offer gear that makes networks more efficient.
Meanwhile, Cisco's results can also be read as an indicator of the health of broader corporate information technology spending. Unlike most of the big telecom gear makers, Cisco makes most of its money selling things like routers to big companies for their internal networks.
But being the juggernaut that it is, Cisco finds even delivering on investors' high expectations doesn't always translate into a marketwide rally. Such was the case following Cisco's last earnings blowout, a first-quarter upside sales surprise that failed to ignite a marketwide rally.