Monday March 31 1:03 PM EST
Ascend Communications Inc sees 1997 EPS dilution from merger
NEW YORK, March 31 (Reuter) - Ascend Communications Inc expects its proposed merger with Cascade Communications Corp to dilute full-year 1997 earnings by $0.05 to $0.10 per share, Chief Financial Officer
Bob Dahl said Monday.
Dahl, in a conference call with analysts, said in response to a question that Ascend expected the $3.7 billion merger to be "mildly dilutive" to first quarter earnings.
The questioner asked if the impact would be $0.05 to $0.10 per share, or a larger figure like $0.25.
"We expect that for 1997 (the merger) will be mildly dilutive," Dahl said.
Asked if this meant $0.05 to $0.10 per share, the executive said, "That's a good way to cast it."
Dahl's comments were relayed to Reuters by First Albany analyst Matt Barzowskas, who participated in the conference call. A tape of the teleconference was later made available to reporters by Ascend.
Dahl said that for 1998, the merger will be slightly accretive.
The First Call consensus prior to news of the merger deal, announced late Sunday, was for Ascend to report 1997 earnings of $1.54 per share.
Dahl, when pressed by an analyst, said the deal could be accretive in 1998 by "more than $0.05 to $0.10" a share.
Executives for Ascend and Cascade said the companies have highly complementary products and distribution channels but limited sales overlap.
"The actual overlap as a percentage of sales is not very large," Dahl said. Ascend Chief Executive Mory Ejabat said the companies, which have about 900 employees each, would combine their sales and service sectors.
"We are going to ask the majority of management in Cascade to help grow this company," he said.
Cascade said late Sunday it expected to report first quarter earnings below anlaysts' estimates.
Cascade Chief Executive Dan Smith said the reason for the weaker quarter was "uneven" buying patterns of telecom equipment from telephone carriers, despite record levels of port utilization.
"While the timing of customer commitments has been delayed, we have not lost any key customer accounts and continue to be the market leader in frame-relay and ATM backbone switching," Smith said. |
