Ikanos Communications ( IKAN) swung to a loss in its fourth quarter, as broadband service providers delayed rolling out new services enabled by the company's chips.

The company posed a loss of $14.1 million, or 51 cents a share, in the three months ended Dec. 31, vs. a profit of $4 million, or 15 cents a share, at the same time a year ago.

Excluding certain items, Ikanos said its loss in the fourth quarter was $7.1 million, or 26 cents a share -- worse than the average analyst expectation of 20-cents-a-share net loss.

Sales decreased 21% year over year to $22.5 million, in line with analyst expectations.

"While delays in carriers' deployments and high equipment levels at carriers adversely affected our fourth quarter results, we do expect improvements in the first quarter of 2007," said CEO Daniel Alter in a statement.

Freemont, Calif.-based Ikanos develops chips for network infrastructure gear used to deliver services such as Internet-based television and phone calls.

"During the fourth quarter we implemented a restructuring plan to reduce overall expenses. We expect to see the benefits of this restructuring start in the first half of 2007," Alter continued.

Ikanos projected that sales in its current quarter would range between $24 million and $27 million. Analysts polled by Thomson Financial expect the company to have sales of $27.3 million, with a loss of 12 cents a share, in the current quarter.

Ikanos said its gross margin level in the first quarter, adjusted to exclude amortization and stock option expenses, should range between 39% and 42%.

Shares of Ikanos were up 2.9%, or 23 cents, at $8.20 in extended trading Monday.

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