Sonus Plans Option Review

Revenue beats targets, but the bottom line remains a closely guarded secret.
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Sonus Networks (SONS) beat second-quarter revenue estimates but declined to offer up bottom-line numbers, saying it would withhold those figures till it completes an internal stock option review.

The Chelmsford, Mass., maker of Internet phone gear said revenue was $64.4 million for the second quarter ended June 30. That's up from $58.1 million a year ago and $60 million in the first quarter. Analysts surveyed by Thomson Financial were looking for a top line of $59.4 million.

But Sonus declined to offer profit figures beyond a coy statement that "net income increased meaningfully from the first quarter of 2006."

Students of Sonus earnings will surely recall that the company made $5.7 million, or 2 cents a share, for the quarter ended March 31.

For the latest quarter, analysts surveyed by Thomson Financial were looking for a 2-cent profit.

Following in the footsteps of tech titans

Juniper

(JNPR) - Get Report

and

Broadcom

(BRCM)

, Sonus declined to offer up full financial details until it completes a probe of stock option granting practices. The news comes as regulators and prosecutors investigate possible option missteps that may have inflated executive pay and led to accounting and disclosure problems.

Unlike Juniper and Broadcom, though, Sonus hasn't said it is being investigated.

"Given the current focus on employee option grants by public companies, we have proactively initiated a review of our documentation and accounting for historical stock option grants," said CEO Hassan Ahmed. "In the spirit of good corporate governance, we are voluntarily evaluating the processes we used to issue options to employees in the past to be sure they are treated properly for accounting purposes. We look forward to providing you with the full details of our financial results, which reflect Sonus' leadership position and growing profitability."

Late Monday, Sonus rose a penny to $4.10.