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

To: Glenn McDougall who wrote (14026)	10/28/1999 7:52:00 AM
From: zbyslaw owczarczyk	Read Replies (1) \| Respond to of 18016

Rob MacLellan, an analyst with CT Securities, said the buzz confirmed his feeling that something may be amiss within Newbridge. "We were telling people as early as Friday that this quarter is far from in the bag," he said. Few days ago, when he put trading buy, his feeling was positive. With change in wind direction, his feeling has changed . Very tipical for McLellan Zbyslaw

To: Glenn McDougall who wrote (14026)	10/28/1999 8:40:00 AM
From: Rob Riordan	Read Replies (1) \| Respond to of 18016

Newbridge shares slide on profit jitters Analysts brace for possible earnings warning for communication equipment firm's second quarter SIMON TUCK Technology Reporter Thursday, October 28, 1999 Ottawa -- Newbridge Networks Corp. shares continued to slide yesterday as analysts grew increasingly nervous that the communications equipment company may not meet targets for its second-quarter revenue and profit. The company's share price fell 5 per cent or $1.55 yesterday to $27.45 on the Toronto Stock Exchange, and is down 28 per cent this month. The Kanata, Ont.-based company has warned of disappointing results in five of its last nine quarters. And if the company does have to release new information -- positive or negative -- about the quarter that ends Oct. 31, it would most likely do so next Tuesday or Wednesday. Analysts say they have no solid evidence to suggest that Newbridge will again have to issue a revenue or profit warning, but the company's poor track record in meeting its targets makes people nervous. "The anxiety level is extremely high," said David Powers, a technology analyst at investment dealer Edward Jones in St. Louis. A First Call Corp. survey of eight analysts calls for the company to earn 32 cents a share during the quarter. Most analysts expect the company to record revenue of about $520-million. But it doesn't take much for investors to take a chunk out of a company's share price when it's being viewed with skepticism, analysts say. "It's been out of favour for the past few quarters," Mr. Powers said. But analysts say there are other things making investors nervous about Newbridge: August is usually a slow month for almost any company doing business in Europe; Newbridge's ratio of orders to sales -- often a key indicator of future business -- was a little weak coming out of the first quarter; and the company's sluggish share price may threaten a key acquisition Newbridge announced four months ago. In June, Newbridge said it planned to buy Stanford Telecommunications Inc. for $490-million (U.S.) in stock. But the deal includes a provision that allows Sunnyvale, Calif.-based Stanford to cancel the transaction if the value placed on Newbridge shares falls below $24, and Newbridge does not make up the difference with additional shares. (The share value will be based on the average closing price of Newbridge stock on the New York Stock Exchange from Oct. 26 to Nov. 8, and the company's shares have fallen below the $24 mark for two days.) That means the deal -- assuming it isn't cancelled -- could cost Newbridge additional cash or force the company to dilute its stock. Analysts say it's unlikely the deal will be cancelled because both sides have too much at stake. Stanford has already broken up its company and arranged to sell off its other assets to pave the way for the Newbridge deal. Newbridge spokesman John Lawlor said both companies have a great deal invested in the deal being finished. "Both sides are highly motivated to get it done." Stanford shareholders are scheduled to vote on the deal Nov. 15. Jim Kedersha, an analyst with SG Securities Corp. in Boston, said there's a variety of issues hurting Newbridge stock. "I think people are worried about the quarter," he said. "I think people are worried about the Stanford deal." The stock has also been hurt by Fidelity Funds' decision to reduce its stake in the Canadian company. Boston-based Fidelity has sold almost one million Newbridge shares in recent weeks as it's reduced its common share stake in the company to about 4.8 per cent of the company from 10.3 per cent.