Below is my response to a comment by Cpt. Kirk on the PAIR thread:
[KIRK]Under those circumstances you are correct, but I can't help feeling the following will be said," Yes, we have made our estimates of ..., however, we see future....possibly slowing due to the asian situation....blah blah, blah blah."
I have to respond to this because I was just at a Morgan Stanley conference in Scottsdale where I met with the CEO (Ejabat) and CFO (Ashby). In its projection of 15-20% revenue growth for 1998 (which is conservative), ASND is assuming ZERO growth in 1998 from non-Japan Asia. Anything over that is pure gravy. What is very, very strong is domestic and European core switching (ATM) demand. RAS/RAC revenue will indeed be flat in 1998 over 1997. However, they publicly said that core switching (ATM) revenue would "cross" (i.e. exceed) RAS/RAC revenue in 1998. As RAS/RAC is flat, that means revenues will indeed be up.
ASND will not "blow away" 4Q. They will hit about 300MM (11% increase over 3Q) and maybe .26/share and save the rest for later. (Again, the CFO stated that they will meet Street expectations on the high end and save the rest for greater visibility down the road). It is pretty clear that 1Q98 is very safe and that revenues are likely to increase at a greater rate as 1998 progresses.
Gary Korn
P.S. Blankmind, thanks for the CPQ article. My theory on CPQ is not gone, but I do think ASND has become (or should be) a pricey target. |
