Sycamore Networks Inc. (SCMR), a maker of equipment that links computers, posted third-quarter profit that beat analysts' estimates. The company also said regulators started a formal probe into stock option grants.
Profit was $10.5 million, or 4 cents a share, Sycamore said in a statement today, beating the 3-cent average estimate of nine analysts surveyed by Thomson Financial. Revenue rose 29 percent to $22.9 million.
Chief Executive Officer Daniel Smith said the Chelmsford, Massachusetts-based company reduced operating expenses to improve profit in the period ended April 29. The profit was the company's fourth straight as demand for equipment to handle Internet traffic and video services rises.
Shares of Sycamore rose 28 cents to $4.36 at 4 p.m. New York time in Nasdaq Stock Market composite trading. The shares have gained 1 percent this year. The company had a loss a year earlier of $12 million, or 4 cents a share.
The U.S. Securities and Exchange Commission is investigating options that were granted in 1999 through 2001, Sycamore said today. The company said it ``erroneously accounted'' for the options and after an internal review restated financial reports from 2000 through the first half of fiscal 2005.
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