ECI Telecom reported Q3 2005 revenue of $162 million, a 26% increase from the $128 million recorded in the third quarter of 2004 and up 6% compared to the $153 million recorded in the second quarter of 2005.
Net income for the third quarter of 2005 reached $6.2 million, or $0.05 per share on a fully diluted basis, compared with third quarter 2004 net income of $6.0 million, or $0.05 per share and compared with $15.6 million, or $0.13 per share, in the second quarter of 2005.
Optical Networks: Revenues for the Optical Networks Division totaled $85 million for the third quarter of 2005, up 23% from the year ago period and up 4% from the second quarter of 2005. Operating income for the Optical Networks Division jumped 472% over the third quarter last year and reached $12.7 million, up 43% compared to the second quarter of 2005. The Division’s operating margin reached 15% in the quarter. The very strong sequential and year-over-year growth in operating income was driven by the continued strong demand from carriers for ECI’s optical solutions. This resulted in increased revenues and improved gross margins for the Division.
Broadband Access: Revenues for the Broadband Access Division totaled $68 million for the third quarter of 2005, up 26% from the year ago period and up 8% from the second quarter of 2005. Operating income for the Broadband Access Division reached $4.5 million, compared to $6.4 million in both the year ago and second quarter 2005 periods. The decline in operating income was primarily related to the geographical sales mix during the quarter as well as the ramping up of new IPTV deployments in Europe.
Data Networking: Revenues for the new Data Networking Division (formerly Laurel Networks) were still minimal and totaled $2 million for the third quarter of 2005, while the operating loss was $7.7 million, reflecting the relatively low revenues and intensive R&D efforts currently underway in the Division. ECI’s second quarter 2005 results reflected less than one month of Laurel’s operations, following its acquisition in June 2005 and included an operating loss of $2.3 million on sales of $0.4 million.
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