Westell WSTL Message Board

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Technology Stocks : Westell WSTL

WSTL 6.130

+8.7%

Nov 26 3:52 PM EST

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To: Mark[ox5] who wrote (20970)	10/20/2000 8:58:22 PM
From: bill c.	Read Replies (1) of 21342

Mark, Let's tackle one issue at a time... Would you agree that Westell produced too many modems during the last 6 months and we are talking about inventory issues? This inventory issue killed revenue and EPS in 2Q and again in this next 3Q. Do you have a problem with 4Q of 120-130mil in revenue and 5-6 cents EPS? Again, I'm assuming Westell will continue to sell ADSL equipment to SBC, Verizon and BT. You were starting to paint a picture that Westell lost ADSL CPE business, becuase of the 3Q projections. You're not going to make money on the pre ADSL ramp. ALA lost alot of money with forward pricing in the DSLAM business. They won the 1996 JPC contract {SBC/PAC-Bel/Bell-South/Ameritech} with forward pricing and a DMT solution. You'll make money in the ADSL market when you produce products in volume. In you numbers, Westell had 11% margin in 2Q, because they produced in volume, ~350k modems. So going forward in a volume ADSL business, Westell can make money with CPE modems. On the DSLAM side, they are working with FTEL. FTEL is providing R&D funding for this venture. ALA and FTEL/WSTL won a 50/50 split of the BT contract a few years ago.

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