Avaya Turns in Third Straight Profit

27 Jan 2004
Avaya, a developer of corporate-phone systems, recorded its third straight quarterly profit as sales improved and costs were kept under control. 
In the first fiscal quarter ended Dec. 31, the company said net income rose to $10 million, or 2 cents a share, reversing a loss of $121 million, or 33 cents, a year earlier. Revenue rose 2.6 percent to $971 million from $946 million. 
Excluding onetime items, the company said it earned $30 million, or 7 cents a share. That beat the 5-cent consensus of analysts surveyed by Thomson First Call. 
Avaya develops sophisticated phone systems and software used in the offices of large companies. While customers had cut back on purchases of phone systems after a swoon in the economy, sales appear to be picking up again now that U.S. growth is on the upswing. 
If that's the case, Avaya might be able to take advantage of the growing popularity of phone systems based on advanced Internet technology, which allow corporations to save money on calls. 
"The increase in revenues we saw this quarter compared to last year reflects what we believe is the beginning of a rebound in capital spending," said Don Peterson, Avaya's chief executive. "Our customers are increasingly turning to IP telephony to deliver real improvements in business value." 
On Tuesday, shares of Basking Ridge, N.J.-based Avaya fell 15 cents to $15.41.