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 : MRV Communications (MRVC) opinions? -- Ignore unavailable to you. Want to Upgrade?

To: Dee Jay who wrote (16550)	10/26/1999 10:38:00 PM
From: Sector Investor	Respond to of 42804

BEST synopsis - not much here. MRV: Solid Q3 Results; Maintaining Attractive Rating Earnings Estimates P/E Q1 Mar Q2 Jun Q3 Sep Q4 Dec Year 1998 $0.27 $0.30 $0.05 ($0.25) $0.37 1999 ($0.03) $0.02 $0.02 $0.02 $0.02 2000 $0.31 - BEST says that MRV reported Q3 revenues of $71.3 Million, down 3% sequentially and in-line with expectations - primarily due to the seasonal slowdown of data networking business in Europe, and increased 14% Year-to-Year. Strong demand for MRV's optical access products fueled the 14% annual revenue growth. Operating margin increased marginally in Q3 to 2.2% from 1.6% in Q2, just ahead of forecast, and EPS came in at $0.02, in-line with their estimate. - They say that geographically international revenues accounted for 54% of the business, down from 57% last quarter due to the seasonal slow down in Europe, while the U.S. accounted for 46% of revenues. Networking products accounted for 75.5% of revenues (from 78.5%), while Optical access product sales made up 24.5%. BEST expects that optical access products, as a percentage of total revenue, should continue to increase in the future. BEST believes that optical access products as well as new product releases should increasingly propel revenue growth over the next few quarters. For Q3, products that were introduced in the last 18 months made up 30% of revenue. Over the next twelve months, BEST expects MRV and its start ups to launch a number of new products including, the New Access - Dense Wavelength Divisional Multiplexers (DWDM), Nbase-Xyplex gigabit routing switch, and Charlotte's Web terabit switch routers. In addition, MRV's new products, which are currently in either Alpha or Beta test, such as Red Sea, OSR and Zuma, should begin to contribute to revenues by the second half of 2000. [Note 2 qtrs in a row, they can't even name NAC's product, and N-X has only one product!] - BEST says that the balance Sheet remained on solid ground in Q3. Accounts receivable DSO increased slightly to 73 from 71 days in Q2, matching their expectation of 70-80 days. They think that going forward DSO should remain in the 70-80 day range. Deferred revenues, however, shifted modestly downward in Q3 to $1.6 Million, due to a slowdown in their data networking business. They think that this is a temporary weakness associated with the typical summer slowdown. Positively, Q3 cash increased to $30 million from $26 million in Q2. [Note. They missed the draw down of long term investments of a matching $4 million] - BEST says that while they believe that there is upside to their revenue forecasts from new product developments, they would like to gain deeper visibility into Q4 and 2000. In addition, Y2K remains a concern for the data networking side of the business, although management has indicated to us that they have not seen any slowdown. They maintain estimates and reiterate their Attractive rating.

To: Dee Jay who wrote (16550)	10/26/1999 10:44:00 PM
From: candleLight	Respond to of 42804

The following story may interest some people in this thread. Intel bought DSP Comm. (DSP) for $1.6 B recently. DSP and DSPG used to be one company. They were separated and came to market back in 94-95. Both DSP and DSPG are specialized in wireless DSP chipset and voice coder. Price of DSPG went up from teens to 40s this year when investors were expecting IPO of AUDC that came to market this month. DSPG owns about 15% of AUDC after selling about 5% to market twice this month. Currently DSPG is valued at half billion, but AUDC is more than $1B. More interesting value of DSPG stops going up after IPO of AUDC. Best luck to MRVC holders

To: Dee Jay who wrote (16550)	10/26/1999 10:45:00 PM
From: Sector Investor	Read Replies (1) \| Respond to of 42804

The synopsis of the Van Kasper report will take some doing - more than I can finish now. Here is the "Investment Conclusion" for now. Given MRV Communications' strong fiber optic performance, new strategic partners, progress on high-end networking product development and the many near-term catalysts, we expect to see increasing investors' confidence in MRV Communications' ability to deliver higher revenue and margins over the next several months. We are reiterating our Strong Buy rating on MRV communications, Inc. (MRVC). Our 12- to 18-month price target of $40 (+82%), is based on 3x FY 2000 sales of $350 million.