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Technology Stocks : PCW - Pacific Century CyberWorks Limited
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To: pennywise who started this subject11/29/2001 11:38:41 PM
From: ms.smartest.person  Read Replies (1) of 2248
 
PCCW Faces Downward Pressure on Lack of Upside Steam: Salomon
Nov 29, 2001 - 15:14:52 HKT
Quamnet News Service
Salomon Smith Barney said it expects near-term downward pressure on the stock price of Pacific Century CyberWorks Ltd. (0008) in the absence of upside catalysts such as sale of non-core assets and aggressive cost-cutting.

Telstra's admission about Reach missing its targets is not entirely surprising given the intense competition in the industry, said analyst Pratik Gupta. EBITDA (earnings before interest, tax, depreciation and amortization) for 11 months ending Dec. 1 is now expected to be US$380 million (US$414 million on an annualized basis) versus earlier guidance of US$450-500 million.

"This is below our 2001 EBITDA estimate of US$649 million and would reduce PCCW's consolidated 2001 EBITDA by 3 percent and EPS by about 9 percent."

Reach's poor performance highlights the need for management to scale up or exit from the business, said Gupta. The house believes speculation on Reach either merging with Level 3 or acquiring its Asian assets is not unfounded.

Salomon has an Outperform (2H) rating on PCCW stock.


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