Ascend Communications (ASND) Message Board

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Technology Stocks : Ascend Communications (ASND)

ASND 220.42

+4.9%

Dec 12 9:30 AM EST

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To: Steve Lee who wrote (1391)	12/14/1996 4:01:00 AM
From: Dee Jay	of 61433

2 thoughts - the "pricing pressures" he mentioned occurred in the summer. The quarter ended 9/30 so if there were reduced margins during the summer they'd have shown up in that quartrly report. As I recall the numbers were fine when the merger costs were extracted out. Schneider did not say that they were continuing so one may assume that they were less of a factor in the 4th quarter - but he also made a point not to discuss Q4. Therein lies the 2nd thought - that maybe they're setting up another Ascend earnings surprise, the kind we're used to seeing. : - ) Keep in mind also that shipments of the TNT had just started before quarter end and the GRF400 hadn't been shipped yet. The TNT ought to be adding nicely to the bottom line but what the GRF400 is doing isn't clear right now absent any remarks from the company. One last thought - they've been running a tradein program, where they'll take in certain competitive products in trade on the Max 4000 series (I think that's the one). You can bet that is putting pressure on the others while allowing ISPs etc. to do substantial upgrades utilizing ASND products rather than CSCO or others. On balance I believe the remarks were positive because the period of pricing pressure (summer) had shown up in the Q3 report. It may be seen as ambiguous but this is just a repetition of the Pres. remarks earlier about not being able to sustain the extreme level of growth on a Q to Q basis. But whenyou start out with an ever increasing base a reduction in the multiplier still will produce very nice growth results - unless the multiplier drops very far and no one has suggested that. Dee Jay

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