Although it is indeed a stretch to link NTAP with Nortel, stocks generally associated with telecom equipment have been rocked by the Nortel revenue warning. NTAP, which had been very strong up until yesterday, has declined sharply - over 12% in less than two days. Some might ascribe this to "profit taking," but the point is that there is no NTAP-specific news (I know of) to account for the decline.
Imagine how NTAP would react if there were some real news. Can you say "volatile," boys and girls?
quicken.excite.com
excerpts follow:
Telecom gear makers off on downgrades, Nortel news
Wednesday, September 30, 1998 11:59 AM
NEW YORK, Sept 30 (Reuters) - Shares of telecommunications equipment makers dropped on Wednesday after Canada's Northern Telecom Ltd. warned its third quarter revenues would fail to meet Wall Street expectations and analysts cut their ratings on companies throughout the industry, analysts said.
"It's the Nortel event. The company created a little bit of confusion at the conference. People came away a little less than impressed. The general feeling about the industry is less positive," said Truc Do, a telecommunications equipment analyst with SoundView Financial Group.
Nortel on Tuesday told analysts its third quarter revenues would fail to meet expectations but earnings would match the consensus analysts' estimate of $0.38 a share compared with $0.30 a share a year ago.
Nortel cited softness in some product lines, U.S. dollar strength versus other currencies and weakness in the wireless telephone division.
Nortel's revenue warning followed an earnings warning earlier this month from French telecommunications equipment Alcatel (Nyse:ALA) , which cited a drop in orders from its traditional client base and the crisis in Asia and Russia. |
