How bad is bad? A few comments in the financial press make me realize (once again) the importance of guiding low. If JDSU originally had guided to 80 to 90% y/y growth and then come out and said they planned to do 115%, the press would be falling all over themselves with compliments. The fact that they originally guided 115% to 120% growth and then this week cautioned they might come in at the low end caused everyone to say business was falling off.
A couple examples:
interactive.wsj.com@4.cgi?mfmuse/text/wsjie/data/SB980456202990884451.djm/&d2hconverter=display-d2h&NVP=&template=atlas-srch-searchrecent-nf.tmpl&form=atlas-srch-searchrecent-nf.html&from-and=AND&to-and=AND&sort=Article-Doc-Date+desc&qand=&bool_query=jdsu&dbname=%26name1%3Ddbname%26name2%3Ddbname%26name3%3Ddbname%3Bwsjie%26named%3Ddbname%26period%3D%3A720&location=article&HI=
JDS is estimating its third-quarter revenue growth will fall between 7 percent and 10 percent and earnings will remain relatively flat. The company also expects that fiscal-year revenue growth will fall toward the low end of a previous estimate of 115 percent to 120 percent. Full-year earnings are now expected to be 82 cents a share, ahead of analysts' estimates of 81 cents.
interactive.wsj.com@4.cgi?mfmuse/text/wsjie/data/SB980456570245610923.djm/&d2hconverter=display-d2h&NVP=&template=atlas-srch-searchrecent-nf.tmpl&form=atlas-srch-searchrecent-nf.html&from-and=AND&to-and=AND&sort=Article-Doc-Date+desc&qand=&bool_query=jdsu&dbname=%26name1%3Ddbname%26name2%3Ddbname%26name3%3Ddbname%3Bwsjie%26named%3Ddbname%26period%3D%3A720&location=article&HI=
More Profit Warnings: More big-name companies lowered expectations for future sales or earnings, including Dell Computer, Corning, JDS Uniphase, Texas Instruments and PMC Sierra. Several firms reported worse-than-expected results for the latest quarter, including Lucent, American Home Products, Eli Lilly, McDonald's and Pfizer. Among those meeting or beating profit estimates: Qualcomm, Compaq Computer, Merck, Johnson & Johnson, Exxon Mobil, SBC Communications and American Express.
So, how bad is bad? If I'm not mistaken, 115% is about 3 to 4X the industry average, about 10X the S&P and, God only knows, about 30X GDP.
Since there's nothing to be gained by over-guiding, if JDS says they'd do 115%, I'm guessing they'll do that or more.
Looking at the broader industry, I'd like to keep track of carrier spending as reports come out.
WCOM reported they're laying off in their consumer and wholesale long distance and focusing on their more lucrative data and Internet businesses.
dailynews.yahoo.com
Verizon reports on Feb. 1 and while I don't have any hard numbers,their website lists contracts relating to fiber optics:
newscenter.verizon.com
newscenter.verizon.com
newscenter.verizon.com
newscenter.verizon.com
SBC's website has a link to their fiber network:
sbc.com
QWST indicates they're less than half way through their fiber build-out:
qwest.com
Qwest has completed local fiber networks in 11 markets and has introduced end-to-end broadband services to business customers, including Internet access, application hosting, integration of local area networks and long distance services. Qwest is on track to complete the remaining 14 local networks by the end of 2001.
I welcome other links to Cap-X indicators, whether major or minor players. I don't follow carriers so I'll need all the help I can get.
Pat |
