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Technology Stocks : ONI Systems Corp. (ONIS)
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To: Frederick Langford who wrote (90)7/24/2001 6:54:18 PM
From: Ibexx   of 227
 
From WitSoundview today: STRONG BUY


ONI Systems
July 24, 2001
NASDAQ: ONIS
Kevin C. Slocum: Head of Telecom Research
Dennis Gallagher: Associate Analyst
Charles Gawlak: Associate Analyst



ONIS: I'm OK; You OK?


--We rushed to get coverage out on ONI Systems in front of the quarter. Beyond liking the longer term story, we did feel as though near-term revenues would be stronger than Street numbers. A $10 million upside to our estimate and higher guidance over the next two quarters from management seemed to bear us out.

--The customer activity and forecasts for new customer names, which we discuss in greater detail below, also support our views.

--Much of the analysts' focus on the call seemed to be on gross margins. We were very close on the quarter, but we have had to make what we feel are minor adjustments to our model based on the company's comments.

--Our biggest embarrassment was an error in our "other" income calculation. Beyond the current year, there were offsets to that and our Street-high EPS estimate for next year remains intact.

--We were pleased with the results and believe that should be the general interpretation of the quarter - but who can figure these days?

--ONI Systems is one of a very short list of well-positioned companies that are making great strides in a challenging business climate. We believe that progress will produce strong rewards for investors during the next 12 months.

--Our $35 target is unchanged and we reiterate our strong buy rating.

Ibexx
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