Stratex Networks, Inc. (STXN) Message Board

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Technology Stocks : Stratex Networks, Inc. (STXN)

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To: Czechsinthemail who wrote (1053)	9/9/2000 11:07:23 AM
From: Rob Preuss	Read Replies (1) of 1762

Hi Baird, Yes... STXN has a superb product line. Yes... the possibility of revenue being less than stellar due to component shortages is the cloud hanging over this stock right now - as far as I know, its the ONLY cloud. (Whether revenue will actually be less than "targeted" revenue depends upon street expectations... I would guess that the street has adjusted its revenue expectations lower after the last quarter's earnings release... so I expect STXN will at least meet those lowered expectations. But the street won't cheer to find that we simply met these lowered expectations... so I'm hoping that we'll actually beat expectations.) During the last CC, the CFO said component shortage issues will be with us for at least a couple quarters. STXN is the 800-pound gorilla in their markets and it has an appetite for components that goes along with its size. Smaller companies can meet their revenue targets by just eating table scraps... but if they're ever to grow to the size of STXN, they'll have the same problems we have with component shortages. But being the 800-pound gorilla has its advantages too... it means we're a big customer of those component suppliers so its means they will return our calls... we just placed a $6 million order with STCO (a supplier of transceivers); that should help out some. Be careful what you wish for... you might just get it. If we do manage to get scarce components it means we'll ship more lower-margin products that have been on back-order. Shipping more lower-margin products will reduce the overall gross margins... we had stellar gross margins last quarter (and beat bottom-line earnings expectations) because we shipped more higher-margin products (Altium) which don't depend upon the components which are in short supply (or we just diverted the components we could get to these higher-margin products). So as revenue starts to get back on track... expect overall gross margins to fall. So much for clouds. On Mon-Thu this next week, STXN will be participating in two conferences sponsored by the financial community: dmcstratexnetworks.com September 11-14 Dain Rauscher Wessels Technology Conference Scottsdale, AZ "Get Connected" September 13-14 Deutsche Banc Alex. Brown London, England 1999 U.S. Growth Stock Conference As a result, I'm looking for the stock to climb later in the week. Institutions attending these conferences will start to see what a bargain this stock is. Rob

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