Jeff,
Have you seen this one.
01/21 19:47-DJ: U.S Robotics' 1st Quarter Meets Expectations; Future Is
Uncertain
By Mark Boslet
Staff Reporter
PALO ALTO, Calif. -(Dow Jones)- U.S. Robotics Corp. said strong holiday
sales of modems boosted first-quarter results.
The Skokie, Ill., modem maker, however, warned that second-quarter results
would depend on how fast Internet and online service providers roll out the new
technology, which allows computer messages to travel quicker over phone lines.
For the quarter, the company met analyst expectations by posting earnings
estimates of 72 cents a share. The results, which include revenue of $645.4
million, up 77% year over year, are likely to be viewed favorably given Wall
Street's worries about the impact of the new x2 technology.
Earnings last year were 45 cents a share.
U.S. Robotics, on a conference call with press, said x2 modems for the
consumer market are expected to ship within the "next couple of weeks." Twenty
large online and Internet service providers are testing the technology are will
deploy it in February.
President John McCartney said he's optimistic that providers will deploy
quickly, giving consumer a reason to buy the new modems and U.S. Robotics the
opportunity for strong sales. The new modems are to operate at 56 kilobits per
second, much more rapidly than 33 kilobit modems, the fastest on the market
today.
U.S. Robotics said the pending release of the new modems created market
confusion in the first quarter, but not enough to significantly stall holiday
purchasing.
It said unit sales of desktop modems, PC card modems for notebooks and its
Pilot hand-held organizer were up 80% year over year for the period and that
prices remained unchanged.
While its systems products - including its popular remote access hub - were
down slightly as a percentage of total revenue, the company said the strong
modem products sales was the reason why. In a press release, the company said
the systems products sales also suffered from lower shipments to to a single
large customer compared to the fourth quarter.
Company officials said they expected continued strong sales in the systems
business.
Some analysts, meanwhile, said on uptick in receivables from the fourth
quarter could draw the scrutiny of investors. U.S. Robotics said in its press
release that it shipped a significant quantity of Sportster modems into the
distribution channel at the end of the quarter to replenish stocks sold during
the Christmas period.
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