Here is some more detail on the DLJ view....
1 16:05 T =Scientific Atlanta Dn -3: Longer-Term View More Positive
The DLJ analysts said substantial profit improvement in the scaled back
satellite operations could help Scientific Atlantic hit the 20-cents-a-share
target, but shipments of digital set-top boxes may trail significantly.
"Such a shortfall could cause a reevaluation of the company's relatively
lofty 50 multiple," the analysts said.
Interstate/Johnson Lane analyst George Hunt, who also attended Scientific
Atlanta's analyst meeting, said he was surprised at the reaction in the
company's stock.
Hunt said Scientific Atlanta told analysts it was comfortable about meeting
its target to ship 500,000 set-top boxes this fiscal year.
The analyst said the timing isn't as important, so long as the company meets
its year-end goal.
"I am pretty bullish," Hunt said. "I came away (from the meeting) with a very
good feeling." -
DLJ analysts are also more bullish over the longer term. They expect the
cable industry, and by extension Scientific Atlanta, to experience sustained
growth well above its historical average. "Until the company's digital ramp
gains some stability, however, we feel more comfortable sitting on the
sidelines with a 'market performance' rating on this name."
Earlier Friday, the company issued a statement saying it was unaware of any
news responsible for the movement in its stock price.
Scientific-Atlanta supplies broadband communications systems, satellite-based
video, voice and data communications networks.
- By Allison Bisbey Colter; 201-938-5298
- Christina Cheddar; 201-938-5400
(END) DOW JONES NEWS 03-05-99
04:05 PM
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