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Technology Stocks : SDL, Inc. [Nasdaq: SDLI]
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To: pat mudge who wrote (2821)9/18/2000 4:47:46 PM
From: Boplicity   of 3951
 
RESEARCH ALERT-Merrill on telecom equipment budgets


NEW YORK, Sept 18 (Reuters) - Merrill Lynch said investors' fears about an expected drop in spending on telecommunications equipment are overblown, since demand for equipment should continue to be very strong.

-- said every year investors get spooked by concerns that U.S. telecommunications carriers will stop spending money on equipment, which triggers a drop in telecoms equipment manufacturer stocks.

-- said U.S. carriers are indicating that their total capital expenditures for 2001 will decline by 3 percent.

-- said in previous years, the initial forecasts of spending by carriers have been inaccurate, compared with their actual spending.

-- said equipment companies should continue to see strong demand since U.S. carriers must continue to spend money to remain competitive; spending on equipment is growing as a percentage of overall capital spending; U.S. operators represent only a portion of a broader global equipment market.

-- said expects that carriers ultimately will arrive at spending budgets that indicate capital spending growth of about 10 percent.

-- said 10 percent growth would be below the growth expected in 2000, but it represents a more sustainable level.

--said it expects that spending on telecoms equipment by U.S. service carriers will grow in the high teens, a rate consistent with the growth forecast for the industry.

-- said some equipment segments will continue to grow faster than the overall industry, including optical networking, high-speed data networking and strategic access technologies such as ADSL.

-- said Cisco Systems Inc. <CSCO.O> and Nortel Networks Corp. <NT.TO> are the best-positioned companies in these areas.

-- said companies such as Tellabs Inc. <TLAB.O>,

ADC Telecommunications Inc. <ADCT.O>, and UTStarCom Inc. <UTSI.O> should continue to perform well
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