Ascend Shares Rise 5.4% Amid Optimism for 2nd Quarter
Bloomberg Technology News
Fri, 10 Jul 1998, 8:24pm EDT
7/10 Ascend Shares Rise 5.4% Amid Optimism for 2nd Quarter (Update2)
Ascend Shares Rise 5.4% Amid Optimism for 2nd Quarter (Update2)
(Adds details on revenue breakdown in 5th paragraph.)
Alameda, California, July 10 (Bloomberg) -- Ascend
Communications Inc. shares rose 5.4 percent amid optimism that
the computer-networking company will meet or beat analysts'
expectations for second-quarter earnings.
Ascend, which is scheduled to report second-quarter results
Tuesday, rose 2 3/4 to 53 5/8 in trading of 5.37 million shares.
The company is expected to earn 28 cents a share, according to
First Call Corp.
Ascend sells equipment that lets phone companies and
Internet providers transfer incoming calls onto the global
computer network. As telecommunications providers expand their
networks to handle growing Internet traffic, they are buying more
of Ascend's switches that use asynchronous transfer mode, or ATM,
technology to route data communications.
''They have the strongest ATM product line by far right
now,'' said Michael Davies, an analyst at Punk, Ziegel & Co. who
rates Ascend ''buy.''
Sales of Ascend switches used in the core of Internet
service providers' networks are expected to grow 40 percent in
1998, Davies said. The company gets 41 percent of its revenue
from those switches.
A year ago, the Alameda, California-based company reported
profit before a charge of $62.4 million, or 31 cents a share, on
revenue of $311.7 million.
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