The telecom equipment provider reported fourth-quarter earnings of 15 cents per share, as compared to the consensus estimate of 4 cents per share. Earnings came in at $66 million, a far cry from the $544 million loss reported the same quarter a year ago.
However, the telecom environment has been a tough one, and Avaya's earnings have come at a painful price. It drastically cut jobs and other expenses to pave its way. This quarter, it also posted a one-time $46 million gain from "curtailing" its pension and retirement plans. Curtailing, a direct quote from its press announcement, just doesn't have a nice ring, though many companies are slicing and dicing employee perks to eke out profits these days.
Good news? Avaya now has more dollars than debt, with $239 million in net cash. In addition, revenues gained 4.3% from last quarter, on increased demand for its Internet protocol equipment. The bet is that enterprises are beginning to emerge from spending hibernation to modernize their communication technology.
Though it remains unclear what the name Avaya actually means, in case you have forgotten, the company was spun off from Lucent
While pleasing in terms of purely hitting -- and surpassing -- projections, the emphasis here seems to be on cost cutting, with a hint of improved demand. It might be a good bet that the climate is improving for Avaya and other telecom equipment providers, but it's hardly time to bank on it just yet.
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