Some specifics from conference call
by: cain_delta (31/M/New York, NY)
40975 of 40994
These are some of the points that interested me:
1. Revenues in excess of $97 million consensus estimates.
2. Management clearly trying to be cautious without misleading analysts. However, they indicated that they were comfortable with consensus estimates for 1999. Especially comfortable with next Q's estimates, indicating that "there is better visibility" then they had last quarter (which they beat). This quarter's results will be based on multiple small orders.
3. Multiwave 4000 made up bulk of revenues.
4. Cash and working cap. increased nicely.
5. CFO comfortable that gross margins will be in low to mid 40%.
6. It is clear that additional announcements of products and customers are very near term -- especially out of Japan and with respect to some of there unnamed customers.
7. There was No discussion (even in Q&A) regarding potential takeover.
8. Sprint relationship is strong -- however, rumors regarding second source supplier appear to be true. Reading between the lines, Sprint accounted for approx. 50% of this quarter's revenues.
9. PRICING HAS STABILIZED. This comment led to two or three questions by analysts (analysts also focused on margins, Europe, Metro, % of total revenues attributd to top three cusotmers this quarter).
10. Analysts seemed neutral to positive.
11. Manufacturing output expected to be full capacity latter part of year.
12. CSCO has given some indications of moving into market, but Nettles said that they would have same trouble CIEN would experience if CIEN moved into reuter market.
13. Lucent tough competitor, but hasn't been as active in RFP process as in previous quarters.
MY overall impression was positive. Management was dealing with analysts in appropriate manner -- managing expectations, while at same time confirming comfort with current projections. Also gave analysts
reasons to believe there will be good flow of positive news releases without promising anything specific. Positive quarter ... hopefully return to profitability will trigger upgrades in next couple of weeks.
Posted: Feb 18 1999 7:11PM EST as a reply to: Msg 40956 by cain_delta
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