Avaya Names Sales Exec As CEO, Posts Profit Dip

Avaya Chairman and CEO Donald Peterson Monday said he has stepped down as the company's top executive and will leave the communication vendor's board later this year.

The company named Louis D'Ambrosio as president and CEO to replace him. He most recently served as Avaya's senior vice president and president of global sales and marketing. D'Ambrosio previously led Avaya's $2 billion services business. Prior to joining the company in 2002, he spent 16 years at IBM.

The Basking Ridge, NJ-based company also named Michael Thurk as COO. Thurk previously served as senior vice president and president of global communications solutions.

Peterson, who has helmed Avaya since its spin-off from Lucent Technologies in 2000, introduced D'Ambrosio as his successor during a conference call with financial analysts Monday to report the company's third-quarter financial results. The results included substantially lower earnings and a nearly five-percent increase in revenue compared to a year ago.

"As we look at our market, we see significant opportunities ahead. We have made progress in capturing them, as evidenced by our strong product sales growth. But there is more potential ahead," Peterson said during the conference call. "The board and I believe that Lou and Mike are the best people to help us capture that potential."

Peterson said he plans to remain Avaya's chairman until September 30.

D'Ambrosio said Avaya's strength in VoIP puts the company in a strong position for future sales.

"It indicates our initial success in maintaining and converting our installed base as well as winning greenfield opportunities. It also importantly positions us for additional sales down the road as enterprises deploy intelligent communications solutions and applications on top of our IP telephony platform," he said.

Avaya's IP line shipments for the quarter were up over 20 percent worldwide with 20 percent-plus growth in the United States, and the company shipped its 10 millionth IP line during the quarter, he said.

Nevertheless, D'Ambrosio said Avaya needs to accelerate its transformation into a full-out IP communications player.

"This transformation is all about embedding communications into customer processes and providing the services that support this integration. This means accelerating our momentum in the communications applications and services that integrate into these processes," D'Ambrosio said.

For the quarter, ended June 30, Avaya reported earnings of $44 million, or 10 cents per share, down 77 percent from $194 million, or 41 cents per share, for the same quarter a year ago.

Revenue for the quarter climbed nearly five percent to $1.3 billion, up from $1.24 billion a year ago.

Indirect sales for the quarter rose 25 percent year-over-year, while direct sales were flat, said Garry McGuire, CFO and senior vice president of corporate development at Avaya.

Shares of Avaya closed up 12 cents at $10.54 Monday prior to the announcement.

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