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Technology Stocks : Advanced Fibre (AFCI) ** IPO
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To: Milkman who wrote (256)1/8/1998 10:31:00 AM
From: Clam Clam  Read Replies (2) of 3299
 
re Q1....

Historically, AFCI has been small enough to avoid the general slowdown all telecom equipment companies experience. If you have a hot enough product and manage your reporting right (and are coming off a relatively small base), you can grow from Q4 to Q1 as AFCI has done the last two March quarters. Unless they start shipping product to a new big customer in Q1, AFCI will likely see a flat quarter (March same as December). I don't know if the ownership base in AFCI is expecting that as most of the ownership is the hot money crowd. However, info like that is always dated and the stock has already had a nice correction so its too hard to tell what expectations are.

I hear Q4 was good and that they should beat estimates by $.02 to $.03... It may be possible that they were counting on signing up GTE and when that didn't happen they might want to be conservative and save a penny for Q1. Therefore, I think they are most likely to report $.17 which would be $.02 above consensus expectations and $.01 better than Robertson, Stephens high-on-the-street estimate of $.16. However, this news is looking in the rear view mirror so much more important is how confident they sound about Q1, Q2 and beyond... If they say to expect a flat Q1 (or down) then the stock could sell-off (unless it sells off sharply before the report). In general, a lot of fund managers get worried if revenues aren't accelerating. It makes sense a lot of the time as companies usually plateau before they go into the tank so they just sell when the growth plateaus and buy back when growth re-accelerates (which could be at significantly higher prices if growth does indeed re-accelerate).

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