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Technology Stocks : Ascend Communications-News Only!!! (ASND)
ASND 197.59-0.9%3:59 PM EST
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To: Sector Investor who wrote (1374)4/13/1998 8:30:00 PM
From: Sector Investor  Read Replies (1) of 1629
 
Synopsis of report by STEPHEN G. KOFFLER: Beats Numbers by a Penny

Ascend reported EPS of $0.26 on $305 million in revenue. This was one
penny above both DLJ's estimate and First Call consensus. Revenue was
in line with our expectations. The EPS favorability resulted from
better gross margins and operating expenses The reported EPS was not much of a surprise, in fact the "Street" viewed the quarter as pretty much "in the bag." The only question was the composition of revenue.

On this front, the company gets both good and bad marks. Core
switching (Cascade) grew only by 1.1% sequentially. This was
attributed to the company not recognizing revenue from the GX 550 ATM
switch. This should be viewed as a positive, since the company made
its revenue number without its high flying new product. Remote access,
the Ascend part of Ascend/Cascade, had declined sequentially for three
quarters. This part of the business grew 8% sequentially, basically
regaining the ground lost in Q497.

However, part of the recovery was attributed to one large order in Japan. This type of an order cannot be expected to recur and it points to a weaker Japan than if the numbers are taken at face value.
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