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Technology Stocks : Newbridge Networks
NN 14.21+1.6%12:59 PM EST
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To: micromike who wrote (9453)2/8/1999 10:10:00 AM
From: Ian@SI  Read Replies (1) of 18016
 
Mike,

Do you believe that all companies have perfectly elastic manufacturing capabilities at all times under all conditions?

Your queries seem to indicate either:

1. A desire to whine, bitch and complain; or,
2. A stubborn resistance to accept information; or,
3. A grudge against NN.

On the off chance that you might really want a better understanding, here goes.

1. A demand increase of 45% Q/Q is unusual. It exceeded the most optimistic estimates of NN's planners. And the bulk of the orders seem to have arrived late in the Quarter.

2. Yes NN manufactures its own equipment. But it doesn't produce its own wafers from Silicon; and it doesn't have its own fabs; and it doesn't produce its own chips. Yes, NN has suppliers. And there just weren't enough ASICs in the pipeline to meet the demand for last quarter.

Yes this happens with many companies. It's called a book to bill greater than 1, or an increasing backlog. In fact, in some sectors, companies deliberately attempt to keep a backlog of about 2 quarters to allow them to make most efficient use of their manufacturing capabilities.

Believe whatever you wish. However, don't expect me to swallow your negativity which seems to be based upon some fantasy that management is not telling the truth; or are all incompetent.
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