BAY Ntwks (under House) Message Board

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Technology Stocks : BAY Ntwks (under House)

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To: rupert1 who wrote (5102)	4/5/1998 7:15:00 PM
From: Paul Fine	Read Replies (2) of 6980

Hi Victor- I was not saying that House was lying to us in the conf. call three weeks ago. The key point is it WAS three weeks ago. The SV report is more current re their survey of the sales channel. House et al cannot respond due to being in the "quiet period". So we don't know what is truth. I was merely trying to point out when a sales curve starts out slow due to customer hesitancy, it would be unusual to see the sales curve suddenly accelerate without a causal factor. That should be the demo units being purchased, with additional sales coming from positive word of mouth from satisfied customers. The time factor of that type of sales call is different than selling a known product. It is the time factor that concerns me now; the absolute issue of acceptance of the new technology is still in question longterm. Cisco does not have to believe in the technology to offer the 8500 as a defensive ploy against Bay. As to believing(which is different than trusting) a CEO to know his sales revs 2-3 weeks before the end of a quarter, that ain't neccesarily true when you are in a new product cycle and expect a heavily backloaded quarter. Not to compare House to Ludwick, but the original thread for Bay in SI started when Ludwick came out in early March 3 years ago and said not only were sales not bad that quarter, but they were accelerating!! He wasn't intentionally lying, he just did not know how bad things were. I said earlier; the key issue in the conf. call will be if House can state that sales have in fact picked up significantly during the first 15 days of April. If the pace of sales remains where it was when the March conf. call took place, then the question on the Street will not be when will sales pick up, but IF they will pick up. That was my counsel for caution yesterday. As to my usual prediction of earnings for this quarter, I agree with the consensus of somewhere between 10-12 cents/share. I feel SV must have had some specific survey data that caused them to question the $580MM sales est., so I think we may come in just alittle light there(eg $570MM). That will be a minor factor in the stock's move on 4/17; the conf call re forward sales will be 95% of the impact on the stock the next day. All the above is just one man's opinion. Paul

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