John et al., a very disappointing quarter and conference call. No tough questions, and poor tea leaves. EFNT blew out numbers, said they could have sold more if they'd had more components. WSTL has product on the shelves. Something doesn't jive.
What I find distressing is that we know SBC is ramping this Q, and WSTL has inventory on the shelves right now. Yet MZ guides us to even lower revenue for this quarter, a full $20M less than last Q, doubtless coming out of CPE for the most part. One is left with the inevitable conclusion that the ramp for SBC must be going to someone else, likely EFNT. If that is true this Q, it is probably the same going forward. So where does MZ come up with his ramp in rev for CY'01? Doesn't look to be coming from the current ILEC customers, at least not those currently ramping.
So MZ spins it forward, making the point about doing $22M of 'international' sales this last Q, and later indicating that is where growth is. My take on this is that he's hoping that BT can bail him out for lost business to the ILECs. Either that, or he's purposely low-balling the rev number so much that he can make sure he ups it later. Thanks a lot, MZ. Just shoot straight, will ya?
Could it be that the 'market share' WSTL took last Q was the bump from their being the swing producer, rather than EFNT? I found MZ's comments about the proportion of the ADSL market being the same between WSTL and 'the other guy' rather disingenuous. If there is a ramp in the US, and WSTL is not going to be part of it, the forward estimate of market share points to a deterioration, and he as much as said so. Yet he makes an apparent backwards-looking comment.
Even now, not shooting straight, MZ? Do you have a death wish for WSTL's credibility with the investment community? Do you have complete disregard for your shareholders?
Yeah, what gripes me is that management had the clear opportunity to guide us down a month ago, when the stock was higher, and it might not have hit us like this. An earlier poster commented on 'credibility.' Exactly. Why should anyone believe MZ's guidance now, promising a wonderful FY'02, after this major hit we just took, when he KNEW they had margin problems and were heading into the end of the Q with a serious revenue shortfall, and said not a word? Doesn't he get it? |
