Benhamou, what's the use of having competition 'on the vise' if you don't tighten the screw?
Does Ascend modem problem help 3Com? I was hoping for the 3Com x2 propaganda machine to crank up a bit.
Ascend stock is doing everything but
Received: September 16, 1997 06:23am EDT From: ZDNet News
From ZDNet News for September 15, 1997 by Larry Barrett
Shares of Ascend Communications Inc. continued to collapse Monday,
slipping $2.75 per share to $32.50 in early afternoon trading.
The networking firm last week announced that intense price competition
and sluggish sales in Europe would cause third-quarter earnings and
revenues to slip below expectations.
As a result, the stock price plummeted more than 15 percent in the past
three trading days.
"I'm scaling back my numbers because the problem is a little deeper than
Ascend or anyone else first acknowledged," said Michael Davies, an
analyst at Utendahl Capital Partners.
"They're having some real difficulties with their 56K modem cards
because in Europe some of the software tweaking literally has to be done
on a country-by-country basis. That's really slowing them up," said
Davies.
Ascend's stock was the most heavily traded issue Monday afternoon with
more than 19 million shares changing hands. Microsoft Corp. and Informix
Software Inc., traditionally among the top five in trading volume, were
lagging behind Ascend at about 4 million shares each.
Several brokerage firms have adjusted their estimates and downgraded
Ascend's stock from "buy" to "hold" status and reduced earnings
expectations.
First Call consensus pegged Ascend to post a profit of 37 cents per
share.
Davies said one of Ascend's biggest problems was the technical glitches
experienced by Internet service providers looking to install faster 56K
modems.
"There have been reports of abnormally high disconnect rates for the 56K
modems," he said. "Major ISPs aren't rolling out 56K servers as fast as
expected because they are afraid they'll either drop a call or slow down
the network because of little changes in the software code. They're
going through it and revamping it but, until they get it resolved,
orders continue to be slow for Ascend's boards."
Ascend, based in Alameda, Calif., can be reached at (800) 272-3634 or
www.ascend.com. |
