Dow Jones Newswires -- January 20, 1998
Ascend's Strong 4Q Comes As Welcome Reversal For Co.
By Mark Boslet
PALO ALTO, Calif. (Dow Jones)--Ascend Communications Inc. (ASND) said strength in its powerful network switches made up for slower sales of remote-access dial-up devices and enabled the company to beat Wall Street's fourth-quarter expectations.
The news of a good quarter came as a welcome reversal for Ascend, which has been struggling to undo the damage a software glitch in its MAX TNT product line did to the company's financial performance and image last year. Ascend, on a conference call with analysts and press, said the software glitch was behind it, and the Alameda, Calif., networking equipment maker was more optimistic about the future.
Company Chief Executive Mory Ejabat said the weakness in the sales of remote-access products - devices that enable computer users to connect to networks such as the Internet - was tied to lower sales at three large Internet service providers. The service providers took a lot of product in the second and third quarters - a total of 3,000 ports - and their buying slowed, he said.
But sales of frame relay and ATM switches used to construct the large data highways at the core of many networks were strong, Ejabat said on the conference call. That strength was particularly noticable in the important telecommunications market, he said.
Analysts said the ahead-of-expectations earnings would likely be well received on Wall Street. Days sales outstanding, a key measure of receivables, also fell seven days in the quarter to 72 days, something that investors will view favorably.
It was a "terrific quarter" with real strength in the core backbone products, said Paul Johnson, an analyst at BancAmerica Robertson Stephens.
|
