CS to report earnings on 9/25 (Monday) and RBAK to report earnings on 10/11 (Wednesday). The main thing is Redback. I think their revenue projection is will be down for 2001. It should give you a trend of what other net equipment issues are doing. CS already said it ain't doing well. Here's news from Dow Jones (may it's more credible than Crammer's site).
Mixed Results Seen For Network Equipment Makers CSCO
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=DJ Mixed Results Seen For Network Equipment Makers >CSCO
22 Sep 14:16
By Peter Loftus
Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--Data network equipment makers should post mixed
third-quarter results, with some benefiting from the growth of the Internet
while other firms struggled through internal restructurings.
Market leader Cisco Systems Inc. (CSCO) and upstarts like Juniper Networks
Inc. (JNPR) should post strong growth in sales and profits for the quarter. In
particular, Cisco should benefit from a surge in spending on corporate networks
as well as solid growth in Internet backbone business.
But mid-tier players 3Com Corp. (COMS) and Cabletron Systems Inc. (CS) are
expected to post losses on declining revenue as they continue to shift gears.
In recent years, many networking companies have capitalized on the growth of
the Internet by selling products to telecommunications carriers and Internet
service providers, collectively called the carrier segment. Cisco is perhaps
the most dramatic example of this, having successfully added fast-growing
carrier sales to its core business of selling products to corporate customers,
known as the enterprise market.
Investors in networking companies have largely focused on the big growth
potential in the carrier market, with the enterprise segment being pushed to
the sidelines. But more recently, some networking firms have seen renewed
growth in enterprise sales. Large companies continue to upgrade their networks
to make sure they are taking full advantage of the Internet. Small and
medium-sized businesses realize that information-based networks are essential
to doing business in the New Economy.
"There is a continued demand pull in the enterprise segment," said B.
Alexander Henderson, analyst with Salomon Smith Barney. "It's an area that
people took their eyes off, but it's accelerating sharply."
Previously, many companies had deferred spending onnetwork gear because they
were busy preparing for the Year 2000 computer bug. The subsequent passing of
the New Year without a hitch freed up money for network projects, Henderson
said.
Indeed, total market sales of switches used primarily in corporate networks
rose 5% in each of the first two quarters of 2000, according to Dell'Oro Group,
a Portola Valley, Calif., research firm. The rise followed flat sales growth in
each the last two quarters of 1999, said Dell'Oro analyst Greg Collins.
Dell'Oro hasn't completed estimates of third-quarter switch sales.
Cisco, of San Jose, Calif., stands to be the biggest beneficiary of the surge
in enterprise sales, partly because some of its rivals have backed away from
the market. In the quarter ended July 31, Cisco saw sales to small- and
medium-sized businesses rise 40% from the previous quarter. Henderson doesn't
expect an increase that big for the quarter ending Oct. 31, but the gains
should be healthy, he said.
Strong growth in Cisco's enterprise division is important because the segment
comprises about half of Cisco's overall revenue. Still, Henderson expects Cisco
to post strong growth in service provider sales, which now account for about
40% of sales.
Overall, Cisco's sales in its first quarter ending Oct. 31 should rise 62% to
$6.3 billion from $3.88 billion a year ago, Henderson said. He predicted the
company would earn 17 cents a share, excluding one-time items, compared with 12
cents a share a year earlier. Cisco expects to report results Nov. 6.
Two rivals that once went head-to-head with Cisco are now going through
substantial restructurings that will hamper quarterly results. In Rochester,
N.H., Cabletron is poised to spin off four units into separately publicly
traded companies, a plan announced in February. It filed Monday for an initial
public offering of the first unit, Riverstone Networks, which makes switch
routers and Web switches for Internet serviceproviders.
Cabletron's change in direction will result in lower sales and profits for
its last quarter. Clifton Gray, analyst with Kaufman Brothers L.P., estimated
Cabletron lost 3 cents a share for its second quarter ended Aug. 31, compared
with earnings of 7 cents a share a year ago.
Gray estimated Cabletron's sales fell 35% to $233.5 million in the second
quarter from $356.6 million a year earlier. The company's Enterasys unit, which
sells switches to enterprises, will contribute the largest portion to overall
revenue, at $185 million, Gray predicted.
While Cabletron's revenues have fallen, Gray believes the company made a good
decision to discontinue certain product lines because it can now focus on
high-growth business areas. Cabletron is scheduled to report results Monday.
3Com, Santa Clara, Calif., is also going through some changes. In July, the
company completed the spinoff of one of its fastest-growing units, Palm Inc.
(PALM). 3Com also has exited the analog computer-modem business and no longer
sells network products to large businesses. Like Cabletron, 3Com also intends
to focus on high-growth segments of the market.
"We're not expecting a lot of growth this quarter," David Toung, analyst with
Argus Research, said of 3Com.
Robertson Stephens analyst Paul Johnson estimated 3Com's sales fell 34% to
$800 million in its first quarter ended Aug. 31 from $1.21 billion a year
earlier. He estimated the company lost 30 cents a share, reversing year-earlier
earnings of 31 cents a share. 3Com is slated to release results Tuesday.
Juniper Networks, Mountain View, Calif., continues to be one of the hottest
of a new class of networking companies that have gone public in the last 15
months. Other hot upstarts focusing on various niches of the marketplace
include Foundry Networks Inc. (FDRY) and Sycamore Networks Inc. (SCMR).
In the second quarter ended June 30, Juniper grabbed some market share from
Cisco in the Internet core router market, which involves sales of high-speed
routers to service providers. Juniper had 22.4% of the market, compared with
75.4% for Cisco, according to Dell'Oro Group. Analysts say Juniper is likely to
gain further market share, eventually stabilizing around 30% of the market.
Nikos Theodosopoulos, analyst with UBS Warburg, estimated Juniper will post
earnings of 9 cents a share for its third quarter ended Sept. 30, compared with
a loss of 1 cent a share a year ago. He expects revenue to rise 392% to $145.8
million from $29.6 million a year ago. Juniper expects to report results Oct.
12.
-By Peter Loftus, Dow Jones Newswires; 201-938-5267;
peter.loftus@dowjones.com
(END) DOW JONES NEWS 09-22-00
02:16 PM |
