FBR Says Telecom Sector Recession May Last Through 2003
Industry Report Identifies Companies Most Likely to Survive Telecom Downturn
ARLINGTON, Va., Sept. 18 /PRNewswire/ -- Friedman, Billings, Ramsey & Co., Inc., a subsidiary of Friedman, Billings, Ramsey Group, Inc. (NYSE: FBR - news), today issued a comprehensive report on the telecommunications industry which says the current recession in the sector will last longer than predicted by most industry observers.
In a 73-page report, ``Surviving the Telecom Recession,'' Senior Analyst Susan Kalla identified companies in the telecommunications service and equipment sectors that are best positioned to survive the protracted downturn. ``In general, we believe values for telecom equipment stocks could decline by a third from their already-low levels as the industry fundamentals continue to erode through 2002,'' Ms. Kalla said.
``We do not believe investors have fully factored in the severity of the drop-off in demand for telecom products in the second half of 2001 and the potential for a continued slide of revenues through 2002 and 2003,'' she added.
In the report, Ms. Kalla says equipment revenues will fall 14 percent this year, as opposed to consensus opinion that assumes a 5 percent decline, and will not stabilize as predicted in 2002 and 2003. She suggests the downturn momentum in revenues and earnings for telecom equipment will not reverse itself until companies complete a major-league restructuring a consolidation to realign expenses with lower revenue prospects.
On August 31, Ms. Kalla initiated coverage of Ciena Corporation (Nasdaq: CIEN - news), Juniper Networks, Inc. (Nasdaq: JNPR - news) and Lucent Technologies (NYSE: LU - news) with 'Underperform' ratings.
Friedman, Billings, Ramsey Group, Inc. (NYSE: FBR - news), the parent company of Friedman, Billings, Ramsey & Co., Inc., is a financial holding company for businesses that provide investment banking, institutional brokerage, specialized asset management, and banking products and services. FBR provides capital and financial expertise throughout a company's lifecycle and affords investors access to a range of proprietary financial products and services. Headquartered in the Washington metropolitan area, FBR has offices in Arlington and Reston, Va., Atlanta, Bethesda, Md., Boston, Charlotte, Chicago, Cleveland, Dallas, Irvine, Ca., New York City, Portland, Seattle, London, and Vienna. Bank products and services are offered by FBR National Bank & Trust, member FDIC and an Equal Housing Lender. For more information, see fbr.com .
Friedman, Billings, Ramsey & Co., Inc. makes a market in the common shares of CIEN and JNPR. Additional information on the securities mentioned in this report is available upon request. This report is based on data obtained from sources we believe to be reliable, but is not guaranteed as to accuracy and does not purport to be complete. Because of individual client objectives, this report should not be construed as advice designed to meet the particular investment needs of any investor. Any opinions expressed herein are subject to change. This report is not to be construed as an offer or the solicitation of an offer to buy or sell the securities herein mentioned. From time to time, this firm, its affiliated entities and/or their respective directors, officers, employees or members of their immediate families may have a long or short position in the securities mentioned in this report. These securities may be sold to or purchased from customers or otherwise by this firm, its affiliated entities, and/or its directors, officers, employees or members of their immediate families, as principal or agent. This publication has been issued and approved by FBR Group under a compliance routine approved by Friedman, Billings, Ramsey International Limited, its UK SFA Regulated subsidiary, for distribution to UK and European non-private clients.
SOURCE: Friedman, Billings, Ramsey & Co., Inc.
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