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Radisys Corporation (NASDAQ: RSYS): Rising Above Third Quarter Loss

|Includes: INTC, MSPD, RadiSys Corporation (RSYS)

Radisys Corporation (NASDAQ: RSYS) is an important vendor of wireless solutions for the telecom, aerospace, and public safety sectors. Its numerous infrastructure platforms allow customers to deploy products and services with speed and reduced risk. The company's solutions are used in different mobile network applications. Its media services include voice, data and video. The wireless market's response to its next-generation ATCA based MPX-12000 has resulted in various opportunities. Recently, RSYS was selected as the winner in the Best of 4G World Awards and it was recently included among Russell's best performing companies in America.

In the last quarter the company shipped its first units to enable video and voice content over LTE networks. If the pace of shipments accelerates in the coming quarters, this development may result in greater than $90 million in revenue over the next five years. Management believes the company's design winning portfolio and combination of hardware and software applications prepare it for growth as tough environmental demand evolves. For instance, its network appliance is the wireless sector's leading platform with Intel Corporation's (NASDAQ: INTC) data kit. Qucell recently announced that it had selected one of the company's software applications for its LTE cell portfolio. G-NET, a Beijing-based service provider, recently agreed to deploy Radisys' platform because it contained features necessary to the expanding Chinese market. Radisys, SK Telesys, and Mindspeed Technologies Inc. (NASDAQ: MSPD) have together developed a solution for small cell base stations to enhance performance.

RSYS reported a net loss of $35.1 million in its last quarterly report. However, included in the net loss was a $29.7 million non-cash goodwill impairment charge resulting from the recent reduction in the company's market capitalization. Commenting on the third quarter results, Brian Bronson, Radisys' Chief Executive Officer, stated, "Our third quarter revenue, while disappointing, did meet the revised expectations we set on October. The spending in the telecommunications sector remains constrained and impacted our third quarter revenue. Despite the soft demand environment, the market reaction we've seen for our products has resulted in strong design wins over the last fifteen months."

Radisys has a market capitalization of $113 million and shares are trading at $4.00. The company has more prospects than its bigger rivals. For instance, International Business Machines (NYSE: IBM) boasts of a market cap of $224 billion and shares are selling for $200 as of today. Hewlett Packard (NYSE: HPQ) has a market capitalization of $33.24 billion and shares are selling at 17.06. The jury is still out as to whether the award winning designs of Radisys will enhance its bottom line in the next few quarters. Hopefully the macroeconomic environment will improve and if that happens, the company's margin will show improvement in the long term.