Some news...
NEW YORK -(Dow Jones)- Ascend Communications Inc., the Alameda,
Calif., networking concern, Tuesday reported a loss of $48.8 million
because of costs of its merger with Cascade Communications Corp.
Without the merger costs, Ascend would have had a profit of $62.4
million or 31 cents a share, which was short of estimates. Analysts
surveyed by First Call had a mean estimate of 35 cents a share for the
quarter.
A year earlier, Ascend earned $44.4 million or 23 cents a share.
Sales climbed by 52%, to $311.7 million.
Ascend said it cut its work force by more than 250 as a result of its
merger with Cascade and the integration of the two companies'
operations.
The company expects the Cascade acquisition to be non-dilutive in
future quarters.
Ascend develops, manufactures and sells wide area networking
solutions for telecommunications carriers, Internet service providers
and corporate customers.
Ascend also said it named Chief Financial Officer Bob Dahl to the
post of executive vice president for planning. The company said Dahl,
who was also vice president, finance, will continue to oversee the
company's daily finance operations until a successor is found and will
remain a director.
Ascend issued its financial report after regular stock trading ended
Tuesday. Its shares (ASND) ended up $1.188 at $53.875.
Copyright (c) 1997 Dow Jones & Company, Inc.
All Rights Reserved.
And this...
By Eric Auchard
NEW YORK, July 15 (Reuter) - Ascend Communications Inc, a
leading supplier of Internet access equipment, said it grew at
or above industry rates in key product lines during the second
quarter, but warned of softness in its European business.
Ascend executives made the comments in a conference call
with analysts late Tuesday after the company reported combined
second quarter earnings of $0.31 per share, excluding the costs
of acquiring Cascade Communications Corp and Whitetree Inc.
Pre-tax merger charges cut second quarter earnings by
$150.3 million, resulting in a net loss of $0.26 per share.
"We see the third quarter in Europe to be flat and the
majority of the reason is because of seasonality," Ascend's
Chief Financial Officer Bob Dahl said.
"Germany and the (United Kingdom) were soft in the last
quarter and we are going to see that in the next quarter," Dahl
said of sales growth in the second and third quarters.
But Mory Ejabat, Ascend's president and chief executive,
speaking during the conference call, said Japan's contribution
to Ascend's overall business rebounded during the second
quarter to contribute 25 percent of revenues, up from 9 percent
in the first quarter of 1997.
Ascend officials said they expected Japan's contribution to
Ascend revenues to return to historic levels around 20 or 21
percent during the third quarter.
Overall, executives said they expected international sales,
including Europe, to grow in the single digits during the
upcoming third quarter. They said they expected North American
growth to be strong, but provided no figures.
Dahl said second quarter operating margins as a percentage
of sales for Ascend as a standalone company declined to 32
percent from 35.1 percent in the first quarter.
Cascade's operating margins rose to 25.6 percent from 24.5
percent in the first quarter, he said.
Dahl said that days sales outstanding, a measure of the
time it takes to collect accounts receivable, rose to 68 days
for Ascend as a standalone company, but showed improvement at
Cascade, dropping to 70 days from 77 in the first quarter.
The finance officer provided no comparison for the
equivalent collection figure for Ascend in the first quarter.
Dahl said the ratio of bookings to product shipments at
Ascend as a standalone company were "greater than one to one"
while Cascade's bookings ratio was "well above one to one."
Dahl blamed the longer sales collection time at Ascend on
delays in shipping its Internet access concentrator product
with new higher speed 56 kilobit modem capabilites, a problem
he said had been addressed in recent weeks.
In response to an analyst's question, Ejabat said he did
not expect to lose any revenues from the 56 kilobit shipping
delay, but acknowledged that product acceptance may have
suffered from a lack of standards for the higher speed modems.
On market gains versus other equipment suppliers, Ejabat
said "If you look at our growth that means we are either
maintaining or growing our market share in some of the areas."
Ascend officials said the company made progress in
diversifying its customer base. It said only WorldCom Inc's
(NASDAQ:WCOM) UUNET, a leading Internet access provider, accounted
for more than 10 percent -- in the "low-teens," they said.
Ascend's shares slipped in after-hours trading Tuesday
following the release of the second quarter earnings, but
recovered later in the evening, analysts said.
One attributed the decline to Wall Street's confusion over
consensus earnings estimates.
Some analysts considered the First Call consensus figure of
$0.35 per share to represent only Ascend as a standalone
company, without the dilution of the mergers, while other
estimates reflected the dilution from the Cascade merger.
Ascend reported earnings on a standalone basis of $0.35, in
line with expectations, but including the dilutive effect of
Cascade, earnings were $0.31 per share, excluding
merger-related costs.
Judged by that standard, Ascend was shy of the consensus.
The company was not available to clear up the confusion.
Copyright 1997, Reuters News Service
And this...
In a statement accompanying the second quarter results, the
company said Bob Dahl, chief financial officer and vice
president, finance, would become executive vice president of
planning and that a search for a replacement was under way.
It said Dahl will continue to oversee the daily finance
operations of the company until a successor is found, and will
remain a member of the Ascend board of directors.
ALAMEDA, Calif., July 15 (Reuter) - Ascend Communications
Inc said Tuesday it had net income of $0.31 per share in the
second quarter, several cents below the Wall Street consensus
estimate for the company's second quarter of $0.35 per share.
Nonetheless, the company said its second quarter net income
rose 40 percent year over year, excluding the costs of
acquiring Cascade Communications Corp. and Whitetree Inc.
Including the merger costs, Ascend a leading supplier of
equipment used to provide outside callers Internet access to
company networks, reported a net loss of $0.26 a share.
During a conference call with analysts Chief Executive Mory
Ejabat said Dahl had agreed to the new role as compromise over
his plans he had to retire.
The company said the integration of Cascade Communications,
the acquisition of which was completed on June 30, is well
underway.
It said sales, marketing and customer support functions are
fully integrated at this point, with the finance and
manufacturing functions in progress.
"We expect to have the integration fully completed by
year-end 1997," Ejabat said.
At that time of the closing it said it had cut the combined
company's headcount by over 250 people.
Ejabat said it believed the cost savings from these job
cuts along with potential synergies from the combination of the
companies will result in the acquisition being "non-dilutive on
a going forward basis."
He said the company had begun shipping modem cards in
prodution volumes Monday used by Internet service providers and
central offices to handle incoming calls from 56 kilobit modems
to its MAX TNT access concentrator product.
Shipping 56 kilobit cards had slipped from their expected
second quarter ship date due to software integration problems.
"We have now resolved those problems and are currently
shipping the cards at full volumes," he said in a statement.
The two acqusitions resulting in one-time, pre-tax charges
of $150.3 million, which cut net income by $0.57 per share.
Copyright 1997, Reuters News Service
Happy Investing!
Vanni |
