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Technology Stocks : Newbridge Networks -- Ignore unavailable to you. Want to Upgrade?

To: Doug who wrote (14016)	10/27/1999 10:46:00 PM
From: zbyslaw owczarczyk	Read Replies (1) \| Respond to of 18016

My notes show that NN's forecast was as follows: Q1:19c , Q2:23c ,Q3:26c , Q4:29c for a total of 97c U.S. Obviously the current price and earnings for this Q do not match. One has to be wrong. The market says Earnings. We now have 23 days or less for a realty check. This was before two affiliates joined NN. Company said it will be dilution about 0.06 in Q2-Q3 b/c new employee are coming what will cost company some money, and two affiliates will not add to much revenue until Q4(I am not talking about one time charges). So I am looking at expenses how they relates to revenue, margins(more access product should produce slightly lower margins, but operational expenses should go down for this segment of business, so profit should be that same as core business) and most importantly at revenue and booking. ----------------------------------------- Core business margins 60%, expencess 40% access business margins 50%, expences 30% So the product mix will effect margins, but profict should stay the sam ----------------------------------------- Zbyslaw

To: Doug who wrote (14016)	10/28/1999 2:44:00 AM
From: pat mudge	Read Replies (2) \| Respond to of 18016

First of all, please answer my questions posted several days ago before you nail someone to the floor for not answering yours. Secondly, a few questions on your broadband statements: As for Broadband capacity, the utilized capacity of available DSL lines is less than 10%. (because of Consumer resistance.) Could you document this comment? How do you estimate "utilized capacity of available DSL lines?" A line is not a line until someone wants it. The customer orders it, the carrier comes out and installs it. It's not like cable where lines have to be run to the neighborhood no matter how many customers want service. If you're talking about head-end systems being under-used, then please cite your sources and list reasons. There is also plenty of dark fibre. All this has lead to price wars and declines of share prices of the Service Companies.If there was genuine shortage, telephone rates would not be falling.! Check out the prices of AT&T, WCOM,TGO during the last 3 mths. Also see At&T latest Q report and Mgmt's forecast. Once the Service Companies feel the belt tighten, they pass some of that squeeze to their suppliers. So get ready.! Are you referring to a drop in long distance rates? How has this changed the price of dark fiber? One is the dying voice service, the other wholesale highspeed capacity. Perhaps you could supply a couple links to articles that explain the synergies and validate fiber prices. A few random statistics that appear to contradict your assumptions. * ADSL lines in useare estimated to reach 1 million by the end of 1999 and 2 to 2 1/2 million by the end of 2000. The majority will be in North America. [Quote as of today from one of the world's largest DSL chip manufacturers.] * Undersea fiber optics systems are estimated to grow at 87 to 100% CAGR into 2004. Fifteen new trans-oceanic systems are going in over the next 18 months. The total submarine market is estimated to be in the "tens of billions." [Quote as of yesterday's DSL conference call.] * The Strategis Group estimates that cable modem subscribers will reach 8.25 million by 2003, up from 420,000 in 1998. Analysts expect @home to have 1.1 million subscribers by year-end. [Quotes from today's IBD: Message 11709922 ] * ATM market from MSDW report: As carriers move to packet networks and expand bandwidth in the local loop, demand for ATM and IP-based switching and network management equipment is growing rapidly. We estimate that growth in the market for enterprise, edge, and core ATM switches is currently more than 40% per year and should continue at that rate for the next few years. Pure data-networking play. Newbridge Networks offers a pure-play opportunity to invest in the data networking space. Industry consolidation has shrunk the number of pure-play data-networking companies sharply over the last few years, as traditional providers of circuit-switched equipment acquired providers of ATM and IP equipment. Strong market position. Industry analysts estimate that Newbridge holds a significant share in the wide area net-work (WAN) and core ATM switch worldwide markets. The Yankee Group and International Data Corp. agree that Newbridge leads the ATM edge and enterprise switch mar-ket with more than a 26% share. In the worldwide multi-service backbone switch market, the Gartner Group esti-mates that Newbridge held fourth place by share in 1998. Newbridge's share was 18.5%, behind Nortel Networks (NT, with 23.6%, Lucent/Ascend with 27.0%, and Cisco Systems with 28.1%. Global, diversified customer base. MainStreetXpress products have been chosen for deployment by carriers glob-ally. Recent contracts for Newbridge equipment include the ACTEW Corp. (Australia, April 1999), the Bulgaria Tele-communications Co. (March 1999), Cable and Wireless (March 1999), Global One (March 1999), and the Zenzhou Telecommunications Bureau (China, March 1999). And, finally, two carrier announcements to substantiate growth in the networking sector: * SBC's earnings report with comments on Project Pinto, their $billion initiative to provide ADSL to 80% of their customers: newsalert.com . The project calls for an investment of $6 billion over the next three years to transform SBC's local network into a next-generation, packet-switched, designed-for- the-Internet platform to deliver advanced broadband services, including always-on, super-fast Internet access. . . . Data Services: Data services revenues increased 43.4 percent over the same quarter a year ago to $1.5 billion, fueled by continued demand for high-capacity, fiber-based products and by the acquisitions of Clover Technologies, a network integration company, in the third quarter of 1998, and Anixter International's North American Network Integration Division in the second quarter of this year. SBC is ahead of schedule in its initiative to make broadband DSL service available to nearly 10 million customers by year-end and has already sold DSL service to approximately 100,000 subscribers. * Expansion in Australia: newsalert.com This post includes a small sampling of what's happening in the networking and last-mile broadband sectors. A full report would fill the Library of Congress. I'm grateful your comments have led to this friendly debate. The ball's in your court and I look forward to your response when I return from tomorrow's H&Q telecom conference. And don't forget to address my earlier post. Thanks in advance. Pat