Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : TLAB info? -- Ignore unavailable to you. Want to Upgrade?

To: ArnieC who wrote (6040)	9/17/1999 11:15:00 AM
From: Nevin S.	Read Replies (1) \| Respond to of 7342

From Hambrecht & Quist this morning: September 17, 1999 - 6:50am Hambrecht & Quist Date: 9/17/99 1 of 4: New Carriers Create New Equipment Opportunities ....snip.... Carrier capital expenditures uptick As a result of conversations with the participants of our quarterly emerging and existing carrier capital expenditure budget survey, we are increasing our 1999 and 2000 spending projections. At the end of the second quarter, our total 1999 capital expenditure projection had been for $68 billion, or growth of 11%. Currently, our new projections call for total 1999 capital expenditures of $72 billion, or growth of 16%. Our 2000 capital expenditure projection had been $70 billion, or a growth of 2%, but after our latest survey we are raising it to $78 billion, or a growth of 8%. This $4 billion and $8 billion increase in our 1999 and 2000 projections, respectively, is due to an increase in capital expenditure budgets at virtually all of the traditional carriers. The incremental increase in capital spending is distributed fairly evenly between the BOCs (Bell operating companies) and IXCs (InterExchange Carriers) as a result of continued growth in Internet usage and access lines growth (for the BOCs). Despite this increased projection, we continue to believe that, for various reasons, carrier capital expenditure budgets are consistently understated. ....snip... Potential for upside in the quarter at Carrier Access and Tellabs Going into this quarterly reporting season, we believe that the potential for upside earnings exists at Carrier Access and Tellabs, both have BUY ratings. We believe that Carrier Access is experiencing robust growth across all of its product families -- Access Bank, Wide Bank and Access Navigator. We believe that the strength in Access Navigator and Wide Bank, both of which are higher margin products, should boost gross margins above the 55% in our model. We also believe that Tellabs has the opportunity for upside in the quarter as a result of the exceedingly strong Titan sales and the contribution of the Cablespan product. We believe that weakness in Martis could be more that offset by better than expected Titan and Cablespan sales.