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Technology Stocks : Ascend Communications (ASND)
ASND 215.25-1.0%3:59 PM EST
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To: pass pass who wrote (21738)11/7/1997 4:46:00 AM
From: Bill Edwards  Read Replies (2) of 61433
 
Ascend is going to have a serious revenue short fall over the next 12 months and the stock price is reflecting market sentiment. Cisco was non existent with Internet Service Providers ("ISP's") in the last couple of years. But has started a major publicity campaign drive with ISP's and has gobbled a bigger piece of the market at Ascend's expense. Ascend has had to drop prices on its products to compete with Cisco.Nor do I have any confidence with the Ascend management.
Do the majority of shareholders respect Mory Ejabat? I think he is a liar. While all the other networking companies were announcing a slow-down in sales, Ejabat was able to convince shareholders that they were "only" expecting strong sales results prior to the merger of Cascade.

From ASND SEC report
"Although the Company's sales are denominated in U.S. dollars,
fluctuations in currency exchange rates could cause the Company's products to become relatively more expensive to customers in a particular country, leading to a reduction in sales and profitability in that country. In addition, sales in Europe and certain other parts of the world typically are adversely affected in the third quarter"

Sales are flat in Europe, Cisco is hurting them in their own market in the USA, Japan looks bad and Asia ... apparently has no impact on them.

Ascend: Vice President Bernie Schneider says his company has felt little impact from Asian troubles. While certain distributors in the region have tightened inventories, Ascend minimizes such fluctuations by accounting for revenue after products are "sold through." Excluding Japan, Asian customers comprise only 5% of Ascend's revenue.

But Japan is no small omission. Schneider did not state what Japan's portion of business is, and softness in that market already contributed to Ascend's drastic profit shortfall in the third quarter.
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