VANCOUVER—Wireless modem maker Sierra Wireless Inc. reported a profit for the third quarter.
The company’s net income was $1.1 million, a reversal of a net loss of $3.1 million reported during the third quarter last year. The company’s net income was down, however, from net income of $3.8 million during the second quarter.
Revenues for the quarter were $52.5 million, nearly double revenues of $27.5 million reported during the same period last year. Revenues were down quarter-over-quarter from $55.2 million during the second quarter.
“The third quarter of 2006 was a period of record new product introductions, continued channel expansion, strong OEM design win activity and technology transition,” said Jason Cohenour, president and chief executive officer of the company. “As expected, we successfully navigated a technology transition with our two largest customers, Cingular and Sprint, to our next generation AirCard products.
“While this transition put short-term pressure on our top-line sequential performance, we were still able to grow revenue by 91 percent compared to the same period of 2005,” said Cohenour.
The company said it expects to report revenues of $66 million and net income of $1.7 million in the fourth quarter.
Analysts appeared relatively satisfied with Sierra’s results.
“Longer term, we remain positive on the market opportunity,” wrote Ittai Kidron with CIBC World Markets. The firm makes a market in Sierra securities. “We believe Sierra’s work to gain share in North America, Europe, and with laptop vendors will pay bottom-line rewards as pricing firms and R&D spending moderates over time, this could possibly drive earnings upside in 2H07.”
Investors appeared unhappy with the company’s earnings, however, sending Sierra’s stock down more than 12 percent to $1.71 per share after the news.
