EZchip Names Cisco,Juniper
8/15/2007 11:09  Resource:Light Reading  Author£ºCraig Matsumoto

    At last, EZchip Technologies has admitted it's won deals with Cisco Systems Inc. (Nasdaq: CSCO - message board) and Juniper Networks Inc. (Nasdaq: JNPR - message board), making it the first network processor startup to crack the two big router companies.

    The two router companies' names came out in the opening minutes of EZchip's earnings call yesterday, as CEO Eli Fruchter began listing some of the company's recent accomplishments.

    Still, stock in Lan Optics Ltd. (Nasdaq: LNOP - message board), EZchip's parent company, was down 85 cents (5.6%) at $14.35 midday. It's probable that investors already factored the Cisco and Juniper wins into the price, considering it's been well known EZchip had worked with both companies.

    Word of EZ chip's win with Juniper was spreading in January 2006, although neither company has said exactly which products are using EZchip's processors. Likely candidates would be the IQ2 set of cards for Juniper's M- and T-series routers, and the MX960 Ethernet box launched last year. (See Juniper Makes Its Ethernet Move and Juniper Antes Up on Ethernet (Finally).)

    Formerly an equipment supplier, LanOptics is now a holding company whose only holding happens to be EZchip. EZchip's earnings have therefore been visible for years but haven't been particularly exciting, charting at less than $5 million per quarter.

    For its second quarter, which ended June 30, LanOptics reported losses of $1.6 million, 10 cents per share, on revenues of $4.6 million, compared with losses of $1.1 million, 7 cents, on revenues of $3.9 million the previous quarter.

    For its second quarter a year ago, LanOptics/EZchip reported losses of $2.3 million, 20 cents per share, on revenues of $1.6 million.

    Did Lan Optics beat analysts' estimates? Hard to say; the company is so small, neither First Call nor Reuters is tracking it. George Gilder knows about the company, anyway. (See That Gilder Touch.)

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