Ascend Communications (ASND) Message Board

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Technology Stocks : Ascend Communications (ASND)

ASND 220.58

+5.0%

Dec 12 3:59 PM EST

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To: gbh who wrote (57308)	11/18/1998 11:46:00 AM
From: Hagar	Read Replies (1) of 61433

I have the same feeling that Lucent will only aquire Ascend after a "hiccup" in Market Value. The potential for this in the near future is very real. I do not profess to know much about the near or long term future markets for Ascends product line but the Quarterly reports are supposed to help. What I have seen with Ascend is that they are focused on the bottom line in terms of predictable revenue and earnings. With the small product mix this does not give me confidence with the future. We see the Enterprise stuff (Pipeline etc.) are shrinking in terms of percentage contribution. The Stratus contribution going forward has no track record for Ascend so I can't get a feel for it. The Core systems business was flat primarily due to a delay in recognizing revenue from NTT. The RAC business revenue was up significantly to compensate. This generated a comfortable bottom line. Next quarter the Core Systems revenue is expected to be up Q-Q. To maintain a consistent Bottom line picture the RAC business will probably be flat, no spikes just predictable. Now will it be flat because revenue is not recognized or because there will be no revenue to recognize. Statements about book to bill greater than one, bookings going forward being good just show me some level of growth summed across all product lines. What this does is confirm that the product Market is not predictable to the investor. With Ascends small mix of products this is worrisome. What happens when both main product lines are flat. Ascend, Lucent and Cisco I'm sure know what the next few quarters hold for Ascend, I DON'T. Without the mix a revenue streams that a Cisco has Ascends predictable bottom line is a poor guide for the future. So, with all the the talk about Ascends business being lumpy, there is a good chance of a slow quarter and the reduction in Market Cap. This is what Lucent will look for, I think.

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