Verizon and SBC are both ramping their daily install rates and Westell announces flat revenue growth for the next 6 months.
I'll assume Service will continue to produce ~10 million/quarter.
TAP is a concern. They announced this week they expect in excess of 100million for fiscal 2001. They did 30.2 million in Q1 and 29.9mil this quarter for 60.1 million. If they don't produce in excess of 120 million for fiscal 2001, TAP will show negative growth in the second half.
Transport and their DSLAM business. Very difficult to make money, just ask Ockit. Westell went from 6.0mil in Q1 to 15.7mil in Q2 and I'll assume slim margins.
CPE - 20% decline from Q1 {Q2-49.5 / Q1-61.9}. On the surface we could point to the Verizon strike, the GTE migration from the Orckit IP equipment and the SBC CLEC install issues. Why can't Westell grow this business in the next 6 months? Verizon wants a 5,000 daily install rate and SBC wants in excess of 6,000 before years. This is a major increase from Q2 quarters. SBS was doing ~2,000/day and Verison finally reached ~3,000/day.
KRO, Baird, Jefferies, Comm. Tech., Frost, etc will have to go back to their old projections before last quarters blow away CPE numbers.
For example, before Q1 CPE numbers :
Frost - Q2/99mil, Q3/113mil, 4Q/119mil - 418mil
Baird - Q2/96.6mil, Q3/98.3mil, 4Q/105mill - 394mill
Frost had a $55 target and Baird maintained their target of $48. Hard to believe Westell is trading below $6/share. |
