Cavium Networks Posts 3Q Loss On Higher Costs

MOUNTAIN VIEW, Calif. (AP) — Chip maker Cavium Networks Inc. posted a loss in the third quarter on Tuesday, as higher operating costs more than offset revenue gains.

Cavium reported a net loss of $4.2 million, or 10 cents per share, in the quarter compared with a net income of $1.8 million, or 4 cents per share, in the same period a year earlier.

But excluding one-time items totaling $4.9 million in stock-based compensation and other costs, Cavium said it earned $800,000, or 2 cents per share, compared with $4.6 million, or 11 cents per share, last year.

Revenue came to $25.9 million, up 6 percent from last year's $24.5 million.

Cavium's third-quarter performance beat the expectations of analysts, who on average were forecasting a break-even period on revenue of $25.1 million, according to Thomson Reuters. Analysts' estimates typically exclude one-time items.

Cavium said several new products and a business recovery drove sales in the quarter. But gross margins fell year-over-year, hurting profitability.

Operating expenses also rose by 38 percent to $17.3 million, which includes stock-based compensation and other costs.

Shares of Cavium, which is based in Mountain View, fell 31 cents to $19.50 Tuesday.