Nettles again:
Guidance:
We've substant. reset short term expectations.
Q4 will be materially below Q3.
1999 will be modest growth over 1998. We've been conservative, maybe too conservative. But warranted in light of past few weeks. Too early to count on growth opportunities.
"Our goal is to underpromise and overdeliver."
"Proposal activity is very strong. We don't expect to win all the deals, but our fair share."
Q&A:
DRP: 4Q expectations?
Nettles: Can't say now. Also, two 10% customers. Don't expect the previously mentioned $25MM to come in, that was a customer we've talked about already (must be DTI).
Q: There had been a disc. of a $10MM order last time?
Joe: Will be recogn. in 4Q.
Q: 1999 up with/without 1 time charges?
Joe: In reference to top line, i.e., revenue. Net income increase includes 1 time charges.
Q: How does CIEN deal with price competition?
A: We have best product, which helps; bundling fiber with equip. is unusual; there is a threat to price, which is why we are looking at lower margins. We are in 3d generation product line, reputation in industry for service, quality and product reliability.
Q: 1999 EPS up modestly?
A: In 1998, 57MM income including charges. So, something better in 1999.
Q: Market opportunities?
A: 2.5B to 3.5B market/year. Lot of growth in Europe. In terms of execution, I'd emphazise we've not lost a lot of business to competitors. With exception of T and DTI, few situations where we expected to win, then lost. So, confident we have right products. Need to focus on resources to deal with customer requirements where we have opportunities identified. On Pirelli, guess is that they bundled DWDM with fiber cable.
Q: How do you compete against the big guys, and their bundling?
A: Most optical networks use existing fiber, so bundling with fiber is an exception. Relationship with CSCO is an advantage to us. |
