Alvarion swings a profit in the second quarter thanks to higher sales, restructuring

Thanks to higher sales and a restructuring effort, WiMAX vendor Alvarion reported a profit for the second quarter--its first quarterly profit since the third-quarter 2008.

The vendor reported a net income of $319,000 after a loss of $10.6 million in the second quarter of 2010. Revenue increased 13.1 percent to $55.4 million.

In February Alvarion announced plans to slash jobs and other expenses to stem its losses and return the company to profitability by mid-2011. Alvarion also said it would focus more heavily on growth in government and enterprise markets as it suffered from slower-than-anticipated deployments of WiMAX technology.

"We are pleased to report that we have met our target of returning to profitability in Q2," said Eran Gorev, president and CEO of Alvarion, in a release. "More importantly, we believe we have achieved a stable core business that will serve as a foundation upon which we can build through new growth-oriented initiatives."

Gorev added that Alvarion's current core business is capable of sustaining a revenue run rate of about $200 million per year with possible moderate margin improvement. "We remain committed to the carrier market where we continue to see profitable WiMAX infrastructure opportunities using the selective approach we adopted earlier this year. Margin improvement is expected to come from a gradual shift in business mix toward enterprise and vertical market applications," he said.

In an interview with Bloomberg, Gorev said sales of its equipment will increase next year as operators look to offload data traffic onto other networks. "Networks can't cope with the rise in demand," Gorev said. "They're looking to offload some of the traffic onto other networks that are more cost-effective to deploy and maintain. We're working on developing our portfolio in this area."

Alvarion forecast revenue in the second half of 2011 will be about $100 million, similar to the first half of the year. Alvarion said revenues in the second half of 2011 will be similar to the first half of the year at approximately $100 million, skewed somewhat toward the fourth quarter.

For more:
- see this Bloomberg article
- see this Reuters article
- see this release

Special Report: Wireless in the second quarter of 2011

Related articles:
Alvarion focuses on government, enterprise as path to profitability
Report: Alvarion may get a boost from India's BSNL
Alvarion wins Italian WiMAX deal, but reports poor Q3 results
Alvarion slashes jobs as major WiMAX contracts stall

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