Our current estimates of $1.50 for fiscal 1998 and $2.25 for fiscal
1999 seem appropriate (i.e. in line with Newbridge management's latest
guidance, effective today).ÿ Newbridge will report Q3 results on
February 24, and the expectation is $0.36 compared to $0.32 reported
in Q2.ÿ Further improvement to the $0.44 level is anticipated for Q4.
As noted, Newbridge's flagship WAN/ATM products should continue to
display strong, sequential, quarterly growth, while traditional
TDM-based products have slowed to 5-6% year-over-year growth.ÿ The
Company remains in an extremely sound financial position with $318.0M
in cash, or $1.67/share.ÿ With its recent spike down in share price,
Newbridge was trading at 20.0X our fiscal 1999 EPS target, which
historically represents a minimal, premium, relative P/E ratio.ÿ Our
tendency is to view Newbridge as an ACCUMULATE (short and long term)
at current prices.ÿ For additional reference, please note our November
26 comment on the Company. |
