Hi Harry; I am not sure if you follow UTstarcom (UTSI); the past 2 days it has been selling off on high volume right after some good earnings news, now at 26.12. I thought I had a good one, but my luck has not been good so far this year.
askresearch.com
It looks like the cause of the weakness is UTSI's low cost cellular standard called PAS may face some stiff competition from GSM and CDMA standards. I have to paste this in, link won't work.
UPDATE 2-UTStarcom's Q4 sales surge 55 pct on China growth
(Rewrites, adds analysts' comments) By Jonah Greenberg
BEIJING, Jan 29 (Reuters) - Telecoms equipment maker UTStarcom <UTSI.O> said on Tuesday its fourth-quarter sales rose
55 percent on year as the China-focused firm bucked a global slump in the sector.
Two analysts said the results were impressive, but market observers said the firm's near-term hopes are pinned largely on a
low-cost wireless service with an unclear regulatory status in China.
"We are quite happy with the results," said Kirk Yang, analyst with Credit Suisse First Boston in Hong Kong, who on Tuesday
raised his share price target to $38 from $35.
Shares in Nasdaq-listed UTStarcom, which closed at $31.32 on Monday, were up about 100 percent since trading resumed
days after the September 11 attacks on New York and Washington.
Sales for the firm, based in Alameda, California, reached $197.1 million in the quarter, compared to $127 million a year earlier,
the company said in a statement.
UTStarcom ended 2001 with a record backlog of $360.7 million of deals agreed but not completed, chief financial officer
Mike Sophie said in the statement.
The firm's pro forma earnings were $27.2 million in the quarter, up from $16.4 million in the year-earlier period, the statement
said.
UTStarcom's actual net income was $16.5 million, or 14 cents per share, compared to $13.9 million, or 13 cents per share, a
year earlier.
THE FUTURE OF 'PAS' IN CHINA
UTStarcom has said it has a market share of about 60 percent for the network gear and handsets used by China Telecom's
wireless "Xiao Lingtong" service, which grew rapidly last year to about five million subscribers.
That service, roughly translated as "Little Smart", uses a standard called PAS, or personal access system, which is built onto a
city's fixed-line network and is less expensive than the GSM or CDMA cellular standards used in China.
While the niche of selling PAS gear in China has fuelled UTStarcom's growth -- and made up about 90 percent of
UTStarcom's sales last year -- some analysts were unsure about the future growth of the Little Smart service in China.
In an industry overhaul, China will split up China Telecom this year and give the resulting carriers cellular licences.
Some analysts question whether those carriers would continue investing in PAS networks after they got their hands on coveted
GSM or third-generation (3G) cellular networks.
"If you look at Wu Jichuan's plans for restructuring, Xiao Lingtong hasn't really been addressed," said Francis Cheung, a
telecoms analyst with Merrill Lynch in Hong Kong, referring to China's top telecoms official.
But CSFB's Yang said China Telecom and its emerging rival were likely to continue investing in PAS, which costs subscribers
in China's cost-conscious market less than half the price of GSM cellular service.
"PAS focuses on a different customer segment from the GSM segment, so the overlap is minimal," he said.
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