Ascend Sees 65% Rise for Quarter

Ascend Communications Inc. said Monday its third-quarter earnings rose 65%, paced by strong sales of computer networking equipment to Internet service providers and telecommunications companies.

Ascend said its net income rose to $66.1 million, or 32 cents a share on a diluted basis, from $40.1 million, or 20 cents, in the year-earlier period. Revenue rose 37% to $370.3 million from $270.4 million.

The results were in line with analyst forecasts of 31 cents a share, according to First Call Corp., which tracks Wall Street estimates.

The No. 5 maker of equipment that links computers in networks won several large contracts from telephone companies during the quarter ended Sept. 30. Also, the rapid growth in Internet traffic has boosted demand from phone companies for Ascend’s networking equipment.

Ascend dominates sales of networking equipment--gear that routes and directs traffic over networks--to Internet service providers, telecommunications companies and cable TV operators.

Ascend shares rose 94 cents to $47.88 on the Nasdaq. The Alameda-based company reported its results after the close of regular U.S. trading. In trading after the close, Ascend shares slipped to $46.75.

Ascend, as it has gained market share and boosted revenue, is increasingly competing more and more against Cisco Systems Inc., the No. 1 networking company, and against telecommunications equipment companies such as Lucent Technologies Inc. and Northern Telecom Ltd. of Canada.

Including $50 million in revenue from the portion of Stratus, Ascend forecasts revenue in the fourth quarter to be $460 million and earnings-per-share of 31 cents. The per-share amount includes about 3 cents related to the Stratus purchase.

Ascend also said it had completed its $948-million purchase of Stratus as a majority of Stratus shareholders voted to approve the deal on Monday. Ascend said Aug. 3 that it would buy Stratus to create a powerful supplier of Internet-based telecommunications equipment.