Synopsis from Cowen: Q4:F97 Tracking To Expectations; New Products To Arrive In C98.
They maintain Neutral rating, give ests of $1.06 for 1997 and $1.15 for 1998 (down a penny).
Cowen says they expect ASND to report $0.23 EPS for Q4.
They add that NA and European business is doing Well, with some weakness in Asia/Pacific.
Cowen expects a number of new products to ship in 1998.
Cowen says that ASND is a dominant player in the Internet access
concentrator market and that following its merger with CSCC, it has a strong position in carrier-class frame relay and ATM switches.
Cowen adds that however, ASND continues to rely heavily on the remote access market with almost 55% of revenues coming from its MAX and TNT products. Cowen says they believe the access concentrator market will slow down over the next several quarters, due to saturation in modems requiring dial-up connections. This could moderate long-term growth and gives them concern about sustained revenue and EPS growth.
Cowen says with about 20% of ASND's revenues coming from Asia, the region's recent economic turmoil may prove to be challenging for the company. [Sector's comment, I believe 18% is the latest number].
COWEN says ASND expects book-to-bill to be above 1 at the end of Q4:F97. On the access concentrator side, ASND is experiencing pricing pressure in South-east Asia and in parts of Europe, but less so in the US, and that ASND expects further pricing pressure in C98 as the competition heats up.
Regarding new products, COWEN mentions a new release and re-launch of the GRF router with several new routing protocols added including ISIS and BGP4 that enable exchange of routing tables across carriers to occur. It will also have the 'right' interfaces to existing CSCO routers in the network.
Cowen also mentions that the GX 550 carrier ATM switch is currently in beta testing at a number of sites and is expected to ship sometime in Q1:C98.
Cowen says the broadband Sahara multi-service access concentrator ATM product for the carrier side will also ship sometime in C98.
Further modem density increases on the TNT will be followed eventually by a next generation access concentrator product.
Cowen says that their recent ISP survey suggests that growth will continue to be challenging for the companyand that ASND's customers suggested lower spending intentions for access concentrators than the median for the group.
[Sector's comment. They still aren't looking much past the end of their nose. No mention of xDSL prospects, Worldnet ATM, Voice and Video capabilities and prospects, etc. No risking their precious ANALyst necks here! They probably will maintain neutral until ASND
hits $40 and 1998 is CLEARLY better - then upgrade.) |
