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Technology Stocks : Efficient Networks Inc - (Nasdaq- EFNT)

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To: Scrapps who wrote (452)	9/20/2000 12:20:28 AM
From: Mark[ox5]	Read Replies (3) of 675

Anyone have any thoughts on revenue for the Q? Projections are for 25% sequential growth from $101 to around mid $120s. Westell who is competitor at SBC and with Alcatel has the Verizon account (2 biggest domestic) basically prewarned to analysts they are going to miss the CPE number projected (they were projected from $61 to $80M) so roughly 30% in CPE business for the Q. They basically guided one of their analysts down to $65M due to SBC weakness ... SBC is 38% customer last Q for EFNT, and granted EFNT has a much more broader customer list and a lot of international exposure, yet they need to make double the CPE sales of WSTL (approx $130M vs $65M for WSTL) and with the weakness in customer #1 it is going to be very hard to show any sequential revenue growth similar to the past. Now this should be a 1 Q hiccup due to SBC poor performance of deployment, but as we all know this market basically cares about 1 week not 6 months, so I think the price performance over the past 10 days or so (40% fall) is indicative of reflection of Westell basically guiding analysts to not expect any CPE growth for the Q, along with whatever EFNT is whispering to the analysts in last week's presentations and this week's DSL conference. Once again, all these are short term issues, but basically EFNT's model calls for nearly $130M revenue and gross margins in the 30-32% to get to break even or better for the Q, and with all the problems in USA deployment by the RBOC's this looks like its going to be a struggle, and usually the price says it before the news comes out. On the plus side, Covad pre announced very good installation rates and they are a 20% customer, and international installation seems to be going gangbusters.. but once again $130M is a very hard number to reach when your #1 customer who is worth more than a 1/3 of sales is looking flat per your competitor guidance to analysts. Thoughts? Mark

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