<<Everything I've read, observed, and experienced leads me to agree with Mike that options trading is an extremely high risk investing approach best left to serious students of that discipline.>>
or at least to our evil doppelgangers... :0)
tekboy/Ares@that'sDRevildoppelgangerforusPhDs.com
PS Fiberoptic Update from Briefing.com
10:14 ET ******
Fiber Optic Boom : Yesterday, we were writing about Corning (GLW); this morning it's Nortel (NT) and JDS Uniphase (JDSU). Different companies; same story. The story is this: demand for fiber optic telecommunications equipment is booming. Nortel beat EPS estimates by a solid five cents and also topped revenue views handily. As with Corning, Nortel's optical products get most of the credit. Revenues in the optical segment grew 150% year/year, and PaineWebber noted this morning that this segment accounted for 65% of the upside revenue surprise for the quarter. Most impressively, Nortel substantially boosted future guidance. Revenues are now seen rising 30-35% in 2000, up from previous guidance of 20-21%, and EPS growth should be around 30%. The 10-15% increase in revenue growth equates to $2.2-3.3 bln in additional revenues for the year. Not surprisingly, a company that receives 16% of its business from NT also had a great quarter and anticipates a better future. JDS Uniphase, a supplier of fiber optic components, only beat estimates by a penny, but the top-line story here was very impressive. The company saw 40% sequential revenue growth, due in part to the OCLI acquisition. But even excluding the impact of that acquisition, sequential growth was 22%. Like NT, JDSU also upped its guidance, telling analysts that sequential revenue growth should be 20% or more instead of the previous guidance of about 15%. Analysts are upping EPS estimates for both NT and JDSU today as a result of the improved revenue picture. It's not hard to see the common thread in this quarter's earnings reports -- demand for fiber optic equipment is booming, and it is greatly exceeding expectations. This should not be a surprise. It is certainly not news that the paradigm has shifted from processor speed to bandwidth; we have been writing about that shift for two years. And within the bandwidth paradigm, there is another paradigm shift: from electrical to optical delivery of voice and data traffic. Being at the heart of two paradigm shifts is a sweet place to be, and Q1 earnings results are confirming that. We now have a bit of a lull before the next wave of earnings reports in this sector, but more good news can be expected. Ciena (CIEN) and Sycamore (SCMR) both report on May 18, while Cisco (CSCO), a more recent convert to optical networking, will report on May 9. - Greg Jones, Briefing.com |
