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Tioga Technologies

(Nasdaq:TIGA) reported splendid fourth quarter financial results. The company bounded past revenue and profit estimates, following in the footsteps of its mother firm,

Orckit Communications


Chipmaker Tioga announced that fourth-quarter income grew to $11.3 million, a 102% increase over Q4 1999. Kaufman Brothers, the only significant investment house covering the company, had estimated income of $6.3 million only. The company beat that estimate by 80%.

Losses are better than expected

Tioga's bottom line is still deep red. Its pro forma losses shrunk to $4.5 million, not including one-time expenditures.

Kaufman Brothers analysts expected losses of $8.5 million, an absolute improvement on Tioga's side.

In terms of earnings per share, losses deepened to 20 cents in the fourth quarter of 2000, compared with 5 cents in the parallel. But the improvement over the previous quarter, when losses came to 27 cents per share, was substantial.

Kaufman Brothers analyst Alvin Kressler had estimated losses of 33 cents a share, not including one-time expenditures.

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If Tioga would have accounted for its astronomic one-time expenditure of $70.3 million, its results would have been entirely different. Per-share losses would have amounted to $3.13. The charges include $8 million for amortization of goodwill and other intangible assets, $0.3 million credit of spin-off expense and $58.1 million in charges for asset impairment.

"During the fourth quarter, Tioga experienced strong financial and operating results," said Douglas Goodyear, President and CEO. "We continue to focus on executing our plan, and are making progress in meeting our goal of at least one central office design win in the first half of 2001."

At the end of January, Tioga announced an agreement with communication giant

Cisco Systems

(Nasdaq:CSCO), expected to generate vast income for Tioga. The significance of a design win is that Tioga will be able to use its chips in Cisco's future product line.

Weakness in Orckit will drag down Tioga

Tioga's main customer today is its parent company Orckit, despite the fact that Tioga management did not provide estimates as for the company's income and losses for 2001, it appears that Tioga will be hit hard by the weakness in the access and telecom markets.

According to Piper Jaffray Nessuah Zannex, Orckit is not likely to sustain its fourth quarter results in the first quarter of 2001. It is expected to show declining income and intensifying losses.

Orckit spun off Tioga at a Tioga share price was $16. Since then, the company's stock has fallen to $2.5.

Tioga's workforce is evidently still in fermen. The company today announced that Dudu Voschina has been promoted to Vice President of Engineering and David Gagne has been promoted to Vice President of Sales, replacing Douglas Goodyear who was promoted to Chief Executive Officer on January 22, 2001.

During the last quarter Goodyear replaced Thomas E. Sennhauser, who was parachuted into the firm in July 2000.