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

To: pat mudge who wrote (14124)	11/1/1999 6:50:00 AM
From: Glenn McDougall	Read Replies (1) \| Respond to of 18016

Newbridge investors anxiously await results Due Nov. 18: Company has come up short in five of last nine quarters Jill Vardy Financial Post OTTAWA - Investors in Newbridge Networks Corp. are nervously waiting to see if the company's second quarter, which ended at midnight on Hallowe'en, will be friendly or frightening. And that nervousness is expected to play havoc with the company's stock this week as it tallies the numbers and finds out if it's going to be forced to send out an earnings warning for the sixth time in 10 quarters. Analysts expect Newbridge to report earnings around 19½ (US) a share. But markets were jittery last week that Newbridge would miss that consensus estimate for its second quarter, which ended Oct. 31. In fact, they've been so jittery that Newbridge stock has dropped by about $7 (US) in the past month. "If there's material information [that differs from the consensus], our objective is to get it into the market as soon as we possibly can ... whether it be materially positive or negative," said John Lawlor, Newbridge's vice-president of investor relations. "But it takes a day or two to get sufficient visibility on our numbers." He called "pure falsehood" a rumour flying on Friday that Newbridge's quarter would be made or lost on a single contract the company was waiting for permission to ship over the weekend. But the very existence of such rumours shows how close to the wire analysts expect this quarter was. Newbridge has been silent on the earnings, as is required by securities regulators, since Oct. 15, two weeks before the quarter ended. But the bulk of sales in the quarter were expected in the latter half of the third month - the very period when Newbridge officials are not allowed to be providing details to analysts and the media about the results. That has made it hard for analysts to get a firm handle on the quarter. "As we entered our quiet period [Oct. 15], the message that I had to deliver to analysts was that it was still too far away from the finish line to make the call," Mr. Lawlor said. That's a real problem for the company and its relations with investors, already strained by Newbridge's recent pattern of missing earnings projections. When you've missed five of the last nine quarters, people want to hear about how good the current quarter is. If they don't hear it, they start worrying. Consequently, "the stock is acting like Newbridge is going to pre-announce," said Paul Silverstein, technology analyst at BancAmerica Robertson Stephens in New York. He, like most Newbridge analysts, isn't willing to hazard a guess about whether the company will make its earnings estimates. "I still believe Newbridge is very well-positioned strategically. But the execution risk, which is well known in this company's case, is part of the equation. If Newbridge misses the quarter again, they reinforce the image of inability to execute and unfortunately you probably end up with dead money for a while," Mr. Silverstein said. On the conference call following release of Newbridge's first quarter results in September, Alan Lutz, Newbridge president, said problems in the company's production cycle have been largely fixed. But Newbridge's August-October quarter is traditionally a slow one for the company because 40% of its sales originate in Europe - a continent that virtually shuts down during August. Therefore, most of the company's business took place at the back-end of the quarter. That's a problem that has plagued Newbridge and the people who try and predict its results. The company has taken steps to "improve the linearity of our quarters," Mr. Lawlor said, but that didn't help the second quarter. But even an earnings warning before the results are published on Nov. 18 probably won't pull down the stock by much, Mr. Silverstein predicted. "At this level, there's not a lot of air to be let out of the tires," he said. In fact, Newbridge's very low current stock price (it closed Friday at $19.75 in New York) has prompted some analysts to raise their recommendations. Robert MacLellan, technology analyst at CT Securities, now rates Newbridge a "trading buy." "Our view is below $20 [US] it has some trading value on it, but we're not trying to call the bottom of the stock because we believe it could be worse before it gets better," Mr. MacLellan said. He's predicting a stock price of $25 (US) in the next year. "I think it's safe to say if Newbridge preannounces, there will be a lot people throwing up their hands and they will want to see some very meaningful changes take place very dramatically, very publicly and very quickly." The current stock price also presents problems for Newbridge's ongoing acquisition of Stanford Telecommunications Inc. for $490-million (US) in stock. Stanford's product line is a key component of Newbridge's arsenal of Internet Protocol (IP) products. But the terms of the deal require Newbridge stock to average at least $24 (US) from Oct. 26 through Nov. 8. If it doesn't - and all signs are pointing that way - Newbridge has to pony up more shares or cash. Mr. MacLellan added that the further Newbridge's share price drops, the more rumours pop up, "99% of them untrue," that the company is on the verge of being acquired by a larger telecommunications equipment maker.

To: pat mudge who wrote (14124)	11/1/1999 8:20:00 AM
From: gbh	Read Replies (1) \| Respond to of 18016

If ECI is shipping ADSL/DMT ANSI-compliant products, their customers are in violation of TI's patents. What about RBAK, CMTN, CSCO, NN, NT, and the myriad other DSL "equipment" providers. Your original list of DSL patent licensees were all DSL chip vendors. I'm sorry Pat, but it just makes no sense to me that equipment vendors who use off the shelf compenents (like the ones I mention above) would be the target of any type of DSL licensing issues. TI, if it owns any significant IP, would sell its own chips (and require no licensing of these customers), and license its designs/patents to other chip vendors. As I understand it, NN's solution does away with the need for a dSLAM. Solution for what? Does away with the need for a DSLAM? Pat, think for a moment what a DSLAM does. It muxes/grooms many lines for presentation to a ATM switch, or to an IP network, where the data is routed to the appropriate destination. The vast majority of DSL lines will be for pure internet services, and for voice service over the same line. An ATM switch, by definition, doesn't provide near the density requirements COs need to deploy these services cost effectively. And what is NN 350, anyway? Is this a DSLAM? Why can't I find a datasheet on this at the NN website? Is it a re-jigged 150 switch? Video over ATM over DSL may have a market. But I doubt it will be sizable enough for the ILECs and CLECs to scrap current and future investments in DSLAM. At least that what the stock prices of companies CMTN, RBAK, etc is telling me. Gary