From Briefing.Com
14:45 ET ******
NEWBRIDGE NETWORKS CORP. (NN) 29 3/8 +4 1/4.
A flurry of good news has this stock up 17%. After the
close yesterday, Canadian networking firm Newbridge
Networks reported fiscal second quarter (Oct) profits
of $0.18 per share (converted to US$), in-line with
expectations. Revenues rose a not too impressive 5.8%,
but that followed declines of 109% and 2% in the prior
two quarters. So, the company appears to have turned the
corner. In addition, a press release from the company
announces that NN has been awarded a contract from
China to build the core national backbone asynchronous
transfer mode (ATM) network across 31 provinces. Today,
Merrill Lynch upgraded the stock from near-term "neutral"
to near-term "accumulate" and SG Cowen upgraded the stock
from "buy" to "strong buy." The stock had been heading
straight down from 65 in late 1997, but has bounced off
its 52-week low of 15 1/4 in October. Is is thus up
almost 100% in less than 2 months. The company still
doesn't make much money, and profits have to increase
significantly from the current quarter in order to justify
a price of 30, but business prospects are clearly improving.
Investing in NN requires confidence that the early signs
of a tech rebound are for real, but then, that applies to
all technology stocks. The outlook for business at NN has
improved, and not all of that may yet be in the stock.
(And the Canadian Press - not sure if this was posted already)
Wednesday Nov 25 13:44 EST
Newbridge shares leap on China Post deal
KANATA, Ont. (CP) - Shares in Newbridge
Networks jumped Wednesday in the wake of solid
financial results and the announcement of a new
contract to supply China's national post office
with an advanced communications network.
By noon, Newbridge shares had risen $4.75 to
$43.45 on the Toronto Stock Exchange. But, at
China Post's request, the contract's dollar value
was not announced. "We have to respect their
wishes," Newbridge spokeswoman Catherine
Wright-Cadieux said. "It's fair to say this is going
to result in significant business for us."
Newbridge recently went through a management shakeup.
On Tuesday, the company reported second-quarter profits
reached $48 million, not counting one-time gains and
charges. That's up 34 per cent from the previous quarter.
The results were announced late Tuesday afternoon after
markets had closed.
Under the latest contract, China Post's Siemens-Newbridge
network will help the company deliver voice, data and
Internet services to customers in 31 provinces across
China.
"Newbridge Networks is pleased to be the
exclusive vendor for China Post's national
backbone," Constantin Loudiadis, Newbridge's
general manager for the Asia Pacific region, said
in a release.
Newbridge Networks, based in the Ottawa area,
designs, makes and sells telecommunications
equipment in more than 100 countries and
employs more than 6,000 around the world.
© The Canadian Press, 1998
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