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Technology Stocks : Broadband Wireless Access [WCII, NXLK, WCOM, satellite..]

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To: transmission who wrote (445)	6/24/1999 12:50:00 PM
From: SteveG	of 1860

PWAV: WINS FRAME AGREEMENT WITH GTE--STRONG SALES TO LUCENT--STRONG BUY Deutsche Banc Alex. Brown - US Equities Brian T. Modoff,Ian W. Toll June 24, 1999 --------------------------------------------------------------------------- ---- POWERWAVE TECHNOLOGIES, INC. [PWAV] "STRONG BUY" Wins Frame Agreement with GTE -- Strong Sales to Lucent --------------------------------------------------------------------------- ---- Date: 06/24/1999 EPS 1998A 1999E 2000E Price: 31.5 1Q 0.13 0.11A NE 52-Wk Range: 37 - 6 2Q 0.11 0.14 NE Ann Dividend: 0.0 3Q 0.01 0.15 NE Ann Div Yld: 0.00% 4Q 0.04 0.27 NE Mkt Cap (mm): 586 FY(Dec.) 0.29 0.68 1.05 3-Yr Growth: 25% FY P/EPS NM 46.3X 30.X CY EPS 0.29 0.68 1.05 Est. Changed No CY P/EPS NM 46.3X 30.X --------------------------------------------------------------------------- ---- Industry: COMMUNICATIONS TECHNOLOGY Shares Outstanding(Mil.): 18.6 Return On Equity (1998) : 15.0% --------------------------------------------------------------------------- ---- HIGHLIGHTS: Powerwave Technologies Inc. today (6/24) announced a frame agreement with GTE Wireless, a major U.S. cellular operator. Initial deliveries and revenues should occur during in 3Q99. GTE has the potential to become a significant customer, similar to BellSouth and another unnamed U.S. RBOC. Recent channel checks indicate that sales to Lucent may be running ahead of our expectations. This contract provides added visibility to our model. We expect the company to beat our 2Q99 sales and EPS estimates. We reaffirm our STRONG BUY investment rating on the shares. DETAILS: FRAME AGREEMENT WITH GTE WIRELESS Powerwave Technologies Inc. today (6/24) announced a frame agreement with GTE Wireless to supply multi-carrier RF power amplifiers for the GTE network. This is a significant customer win for Powerwave, and provides strong added visibility for the company. We are reiterating our STRONG BUY investment rating on the company's shares. The GTE agreement forms a long-term supplier relationship between Powerwave and GTE Wireless, a major CDMA cellular carrier with 4.8 million paging and cellular customers and properties in 17 states throughout the U.S. Under the agreement GTE will deploy Powerwave's 60 and 90 Watt RF multi-carrier cellular amplifiers. Initial deliveries and revenues will occur during in 3Q99. No dollar value was specified. We note that other major U.S. cellular operators, including Bell South and another unnamed RBOC, have become significant customers of Powerwave. BellSouth currently accounts for 5+% of PWAV's sales, and the other RBOC should account for 5+% of sales in the second half of 1999. GTE has the potential to become a customer of this magnitude. LUCENT DEMAND STRONG Recent channel checks indicate that sales to Lucent, a 10+% customer, are running ahead of our expectations. This may be in part due to recent yield problems at another independent amplifier vendor that supplies to Lucent. Although it is not clear whether these issues are temporary or longer-term, the near-term impact should be beneficial for Powerwave. Although we are not revising our estimates at this time, this contract provides added visibility to our model. Powerwave bookings continue to be very strong, and we expect the company to beat our 2Q99 sales and EPS estimates. We reaffirm our STRONG BUY investment rating on the shares.

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