Hi Bernard-- IMVHO, this is a good one for bottom feeders. They are growing Q4 revenues 50% over last year. Take a look at their top line. That is what is impressive to me. And as their new CEO said, it's almost embarassing with this kind of revenue stream, they failed to execute on the bottom line.
But he has not been in actual command very long. Today, officially, he is now in charge of day to day operations. He is getting rid of the old one-way product as part of the $17 million write-off. And is putting ANTC squarely in front of the broadband train. All the products left will help a cableco upgrade to two-way HFC and of course, cable telephony.
The only thing they really need to do is to execute on the bottom line. IMHO, the top line is pretty automatic for next few years. I just read somewhere that only 1 million cable homes are digital capable. And I believe there are 70 million homes to go. Plus, there are a negligible amount of cable telephony customers today. T alone has plans to hook up something like a million or so by 2001. So that gives you some idea of the growth prospects ANTC is postioned to take advantage of.
I was concerned about T's plans (T is almost a 50% customer of theirs) for upgrading their huge cable network. But Stanzione(CEO of ANTC) had a good point. T is clearly ordering voice ports now and slowing the purchase of HDTs(Host Digital Terminals). Stanzione says T is on the ordering track to do 400,000 to 500,000 voice lines in 2000. So it appears that T's spending is for real. But the risk is T getting back to re-ordering HDTs(BTW, there are 1,010 HDTs out in the field today). IMHO, it will happen only if the voice port deployment is sucessful(I'm refferring to the revenue side). But even if it's not super successful, their is always spending being done on HFC to get those broadband data customers revenues rolling in.
The real risk in Antec (as it has been for many, many years), is their tie in to one customer. Previously it was TCI. Now, as you know, that has converted over to AT&T. But I have to say, I would have been happier if he had also mentioned, from a strategic standpoint, he was going to diversify the customer base so they wouldn't be so locked into T's spending plans. But he never mentioned this. But on the bright side, T is the customer most equipment suppliers would love to be locked into!
Here's the replay number for the CC. 1-888-888-9538. It's worth a listen. Stanzione sounds like he really knows his business well. I just wish he did the CC before the stock got crushed.
Hope this helps.--MikeM(From Florida)
PS PaperChase- There are only two other competitors for cable telephony. ADC Telecom makes Homeworx. And Tellabs makes Cablespan. Both are mentioned by name in the ANTC CC. |
