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Technology Stocks : Nortel Networks (NT) -- Ignore unavailable to you. Want to Upgrade?

To: Mr.Fun who wrote (3085)	7/27/1999 11:32:00 PM
From: Paul Fine	Read Replies (2) \| Respond to of 14638

Impression of Conf Call: Shorter than many(only 45 minutes). Since the numbers have been posted many times, I will deal here with my overall impression, and what I think was the impression NT made on the analysts. Overall, very positive presentation, with very few if any caveats going forward(unlike LU). In fact, Roth made the point a couple of times, directly and in response to questions, that he sees no Y2k slowdown in the Carrier segment or big Enterprise customers. Smaller Enterprise customers' situations are "all over the map". However, he made the point that NT's business is driven by the Carrier market, not the Enterprise market(unlike, say a Cisco). They took 15 questions from analysts, with only four addressing "Bay" subjects. This is a marked change from previous qtrs, and reflects(IMO) and understanding by the analysts that the Bay integration is complete. There was identification that Enterprise is only growing single digits on an "apple to apple" basis, and probably will be at that level going forward. Decline in shared media(hubs), the loss of distributors in Europe after the merger and more Y2K impact than in Carrier segment are the issues here. Only the Europe issue is NT-specific. Roth made the point that Bay has been a major help in the Applications' side of Enterprise, which is doing quite nicely(eg, Symposium). More questions dealt with wireless. Although one question was about why the growth is so much less than competitors, the rest were more about whether NT was in fact being too conservative in its Wireless est going forward. Roth said that the growth rates are reflective of starting "footprints"(ie, baseline sales), wherein NT had a bigger base. Said that the $3Billion this qtr(or was it the 1st half?) was the largest piece of the contract pie. Re being too conservative with only mid-teens growth for year, Roth said after a weak first qtr, they are being conservative. A key factor will be the level of recovery in Brazil(was off 40% last two qtrs). On the issue of Optical parts shortfalls, this problem continues, but is factored into estimates. It was a major factor in a higher than desired DSO because NT took the conservative position of not accounting for revs from invoices that were incomplete shipments. Sounds like customers weren't lost due to shortfalls, but they are just waiting for rest of order. Means more revs/profits down the road. Roth finished with a reiteration that the portfolio going forward is very well positioned for 2nd half of 1999 and YR 2000. Saw none of the cautionary drivle that LU gave out,which started the stock price slide last week. All the above is just my takeaway. Look forward to hearing from others. Paul