Sycamore shares rocket on reports of contract win
NEW YORK, Sept 12 (Reuters) - Shares of telecommunications equipment maker Sycamore Networks Inc. <SCMR.O> rose to a 2-1/2 year high on Friday on reports the company may have won a portion of a government contract worth as much as $900 million over two years.
Lehman Brothers analyst Steve Levy cited a report on telecommunications networking Web site Light Reading (http://lightreading.com), which reported Sycamore, Cisco Systems Inc. <CSCO.O>, Ciena Corp. <CIEN.O> and Juniper Networks Inc. <JNPR.O> won portions of a federal contract for equipment.
A spokesman for the Pentagon and the agency involved did not return repeated phone calls.
Sycamore, whose shares rose as much as 27 percent, won the contract for optical digital crossconnects, the Web site reported, citing a vendor involved in the bidding and a federal equipment consultant. Sycamore officials declined to comment or even confirm they are bidding for any of the work.
Cisco and Juniper could not be reached to comment, while Ciena said no contract has been awarded and it is still in the running for the optical transport portion of the contract.
The U.S. Department of Defense's Defense Information Systems Agency is looking to build a large, global communications network that will combine fiber-optic communications and data routing products.
The contract is being broken into four parts: optical transport, optical digital crossconnects, multi-services provisioning platforms (MSPPs) and Internet routers.
In an optical network the MSPPs are the on-ramps, the optical transport creates the bandwidth and the digital crossconnects manage the bandwidth, while the routers are the big data switches.
"The win for Sycamore is a huge positive for that company as it reestablishes the company in its core market," Levy said in a research note.
Cisco won the contract for the MSPPs, but a second supplier is likely, the Web site reported.
"The win for Cisco is a positive surprise and also represents a negative event for Lucent, the supplier we thought had the best chance of winning this business," Levy said.
Ciena won the supply deal for optical transport and switching, but a second supplier is likely, the site said. "In our view, the win for Ciena is likely to be viewed as neutral to slightly positive, since the company was in line to win two segments," Levy wrote.
Juniper reportedly won the contract for "core" Internet routers, Light Reading said. It did not identify a winner for the "edge" routers.
Core routers are used on high-speed connections between cities, while edge routers direct data where telecom service providers connect to customers at such locations as office parks, high-rise buildings and smaller central offices.
Sycamore shares rose as high as $5.25 and were still up $1.02, or 24.7 percent, at $5.15 in Nasdaq trading. Cisco shares fell 9 cents to $20.62. Ciena share were off 4 cents at $6.92. Juniper shares rose 9 cents to $16.88.
09/12/03 11:50 ET |
