The Bloomberg Article discussing about the July Month and
how the filing did not include Cascade revenues
-------------------------------------------------------------
Ascend Communications Shares Fall on Revenue Concern (Update1)
(Adds analyst and investor comment, updates stock price.)
Alameda, California, Aug. 11 (Bloomberg) -- Ascend
Communications Inc. shares fell as much as 10 percent after a
Securities and Exchange Commission filing by the networking
company showed its July revenue was below analysts' expectations.
Ascend shares fell 4 1/4 to 45 3/16 in midafternoon trading
of 14.9 million, making Ascend the most active U.S. stock.
Earlier the shares touched 44 1/2.
Ascend said in an 8-K filing that its July revenue was about
$62.8 million, which lags analysts' forecasts of about $235
million for the third quarter as a whole. Making up the shortfall
in August and September will be a challenge, especially since
like July, August is a typically slow month, analysts said.
``They've got a lot of ground to make up,'' said Robert
MacLellan, an analyst at Dillon Read.
Ascend took its entire sales force away on a weeklong
training session in July to familiarize them with products made
by its Cascade Communications Corp. division, MacLellan and
investors who spoke with the company said. That cut out a week of
selling. Ascend bought Cascade for $2.8 billion in June.
MacLellan said the SEC filing does not include sales from
Cascade, which will add about $100 million in the quarter. He
said that he is not changing his estimates or his ``outperform''
recommendation on the stock.
``People are reading too much into one month's number,''
said Zurich Kemper networking analyst Christine Chien. Zurich
Kemper owned 1.5 million Ascend shares at the end of March.
Some investors said they would hold onto their Ascend
shares, because the company met its forecasts in the second
quarter after overcoming a problem with flaws in the chip inside
its 56 kilobit-per-second modems.
During that quarter, however, it guided analysts to reduce
their forecasts because of delays from the chip problem.
Alameda, California-based Ascend is one of the largest
suppliers of remote access equipment used by Internet service
providers to link hundreds of telephone callers into the
Internet.
After a roller-coaster ride during the second quarter as
investors tried to assess the impact of the 56K problem on
earnings, investors are facing another nail-biting quarter, said
Jeff Coe, a fund manager with Campbell Advisers, which owned
60,000 Ascend shares at the end of March.
``It takes a lot of intestinal fortitude to own this
stock,'' Coe said, adding that he is not selling any Ascend
shares.
Ascend stock rose 13 percent on July 29 after Chief
Executive Mory Ejabat told an investors conference that he was
optimistic about the outlook for the third quarter.
Ascend executives were not immediately available for
comment. |
