Ascend Rises After Report It's Close to MCI WorldCom Contract
Alameda, California, Nov. 10 (Bloomberg) -- Ascend Communications Inc. rose as much as 5.3 percent after Network World Magazine reported that the computer-networking company is close to winning a $50 million contract from MCI WorldCom Inc.
Ascend climbed 2 1/8 to 51 5/8 in early afternoon trading of 4.39 million. Earlier, the shares touched 52 1/8. Ascend and MCI WorldCom declined to comment on the possible contract, which was first reported yesterday on the trade publication's Web site.
Ascend has won several large contracts in recent months from phone companies that want to use its asynchronous transfer mode, or ATM, switches to route data traffic on their networks. Ascend's ATM gear is more powerful than rival offerings from top network-equipment company Cisco Systems Inc. and telephone equipment-maker Northern Telecom Ltd.
''Ascend is winning all the important ATM deals right now,'' said Craig Johnson, principal analyst at market-research firm Pita Group in Portland, Oregon.
Analysts also have speculated that No. 1 U.S. phone- equipment maker Lucent Technologies Inc., which competes with Cisco and Northern to sell networking equipment to phone companies, may buy Alameda, California-based Ascend to get its ATM product line.
Citing unnamed sources, Network World said MCI WorldCom plans to use 70 of Ascend's CBX 500 computer switches in its data network and estimated the value of the contract at about $50 million. Ascend had third-quarter revenue of $370.3 million.
Jackson, Mississippi-based MCI WorldCom, the No. 2 U.S. long distance company, was formed in September when WorldCom Inc. bought MCI Communications Corp. for $47 billion.
WorldCom has used Ascend equipment in its frame-relay data network, while MCI has used equipment made by Northern Telecom's Bay Networks.
14:17:19 11/10/1998 |
