CMNT expects its SAN over IP product line to be very popular with EMC's large SRDF installed base and the competitive offerings of its rivals. The global carriers with advanced all-IP backbones, particularly the wireless carriers who are leading the charge for IPv6, are expected to be the heaviest adopters of this technology so EMC's continued success with this market (see below) is bullish for CMNT which has an exclusive technology and marketing arrangement with EMC.
Also, CMNT's third quarter ends at the end of October so the earnings report from EMC and McDATA should provide some more ideas of how well the overall storage networking market is doing. CMNT's SPO -- 3.7M + 0.555M shares -- is scheduled for this week and should add over $100M to CMNT's $30M cash balance. The managing underwriters are Bear Stearns, SG Cowen and Wit Soundview.
Here are the reports on EMC's quarter:
11:30am EDT 4-Oct-00 Deutsche Banc Alex. Brown (P. Rueppel/G. Benothman) EMC C3Q00 Quarterly Earnings Preview-Part 1/2
EMC:
* Our F3Q00 estimate for operating EPS is $0.19 on $2.23B in revenues, up 30.3% Y/Y. Our EPS estimate is inline with Street consensus estimate. We remain very comfortable with our estimates and believe that there could be some upside potential on both the top and bottom line.
* Market demand for storage continues to be extremely healthy - demand for overall storage capacity is accelerating while requirements for availability and manageability are become increasingly stringent, requiring higher degrees of intelligence in storage systems.
* Company continues to execute solidly, on the product development front and on the sales front. Specifically, EMC is not seeing any weakness in their European business and is enjoying significant wins in new industries such as telecommunication, with mobile handsets accessing Internet content. GTW:
12:42pm EDT 4-Oct-00 Merrill Lynch (Investor Support) AMCALL EMC SUMMARY RESEARCH SUMMARIES:Intra-Day Special Call; EMC ML++ML++ML Merrill Lynch Global Securities Research ML++ML++ML RESEARCH SUMMARIES Intra-Day Special Call; EMC Investor Support Emc Corp (Emc, $90, B-1-1-9) 00E $0.77; 01E $1.06
o We believe the recent weakness in EMC is part of a general technology market sell-off.
o In addition, Dick Egan has filed to sell 2.02 Million shares, he has not sold any of these shares yet. This is less than 10% of his overall holdings.
o We believe that this announcement combined with the general weakness in the market is putting pressure on EMC shares.
o After spending the morning checking in with our contacts we believe the business remains strong.
o Our outlook for modestly accelerating top-line growth for the next couple of quarters remains intact.
o We believe that this sell off is not based on fundamentals and we reiterate our Buy rating. (T. Kraemer)
EMC Corporation (EMC-$94-Cap $205B-Buy) Amit Chopra 415-836-7676
Chairman Registers Shares, EMC Shares Down - No Sign of Weakness
* EMC's shares showed weakness this morning as the company's chairman registered to sell 2.1 million shares.
* We believe that the market may have overreacted since the registered shares represent only 8-10% of the chairman's holdings.
* EMC continues to experience strong demand and remains on track to meet or beat our third quarter sales forecast of $2.2 billion and EPS estimate of $0.19.
* We reiterate our Buy rating.
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