NEW YORK -(Dow Jones)- Analysts expressed concern Tuesday that
fluctuations in orders might hurt second-quarter results of Fore Systems
Inc., a maker of telecommunications-networking gear.
At the close, shares of Fore (FORE) were down $3.25, or 17%, at
$15.938 as volume exceeded 11.2 million sahres. Fore's quarter closes
Wednesday, and analysts say the company is seeing a rush of orders at
the quarter's end, rather than spread evenly through the quarter as Fore
had hoped.
Also, there are concerns that Fore wasn't able to ship a new ATM, or
asynchronous transfer mode, switch in time, analysts said. Fore, of
Warrendale, Pa., makes ATM switches, internetworking software and
network management software, among other products.
The mean estimate of analysts surveyed by First Call was for earnings
of 14 cents a share, compared with seven cents a share in the year-ago
period.
Al Tobia, an analyst with NationsBanc Montgomery Securities Inc.,
said Fore's second-quarter revenue will deviate from his estimate of
$155 million by "plus or minus $5 million" depending on how much product
the company can ship in the next two days. Tobia continues to rate Fore
a "buy," but warned of short-term volatility because of the
product-availability issues.
But analyst Paul Johnson of BancBoston Robertson Stephens Inc. said
Fore's outlook remains good. The company has begun shipping its
high-capacity ATM switch. While investors perceive the shipment as late,
it is actually on schedule since it was always planned for October, he
said.
A bigger issue, according to Nutmeg Securities Ltd. analyst Andy
Schopick, is whether Fore can offset the costs of its acquisition of
closely held Berkeley Networks of Milipitas, Calif. That deal was valued
at up to $250 million. Berkeley is considered one of the hottest private
companies in the networking industry, as a maker of next-generation
switching and routing equipment based on multigigabit technology.
Copyright (c) 1998 Dow Jones & Company, Inc. |
