briefing.com on NN
(apologies if already posted...)
08:55 ET ******
NEWBRIDGE NETWORKS (NN) 23 5/16. Coming in as expected on earnings makes the list on a slow day in August. Canadian based networking company Newbridge (NN) reported after the close Tuesday that fiscal first quarter (Jul) earnings per share were $0.14, in line with expectations, but down from year-ago $0.26 per share. NN earnings plunged in the prior fiscal year and the stock followed suit. NN had hit a high of 69 3/8 in October of 1997, and it has been downhill since. Most networking stocks, with the exception of Cisco (CSCO), have had similar problems. Revenues topped out in the quarter ended April 1997, and have gone down since. For the current quarter, revenues fell 2% from prior year levels. Earnings $0.14 for the current quarter and the slight revenue drop suggests that NN might be stabilizing the business, but it is too early to say for sure. The stock price has leveled off since mid-June, which is more than can be said for the overall market, suggested many belief that NN has brought the situation under control. If NN does get the business going again, the stock has some up side potential, but even at $23 the market has priced in a decent business rebound. If NN continues to struggle, the stock can still be considered overvalued. There are probably better plays in the networking industry to look at. |
