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

To: Ian@SI who wrote (14256)	11/3/1999 12:54:00 AM
From: pat mudge	Read Replies (2) \| Respond to of 18016

The NN bull sold. Now there's a contrarian indicator if I ever saw one. You may be right, but as someone once said, "You don't have to take the same bus home that you took out." Looking for another bus. . . Pat

To: Ian@SI who wrote (14256)	11/3/1999 6:18:00 AM
From: Glenn McDougall	Respond to of 18016

Newbridge sinking President resigns over poor 2nd-quarter showing By KEVIN BELL, Ottawa Sun NEWBRIDGE Networks Corp. stock price collapsed yesterday after the company said dismal quarterly profits forced the resignation of president Alan Lutz. Company chairman Terry Matthews refused to discuss the sudden departure of Lutz, who was brought on board just over a year ago to engineer the company's growth. "He resigned and I accepted the resignation," Matthews said. "The reality of the second quarter was a tough pill for me to swallow." Lutz's resignation came one day before Newbridge issued yet another warning yesterday that it will fail to meet analysts' forecast profits -- its sixth such warning in the past 10 quarters. Preliminary results for the second quarter show the company will make between 8cents and 10cents US a share -- roughly half the consensus predicted by analysts polled by the First Call investment research network. As a result of the poor showing, investors bailed out in droves, driving the stock down 22.7%. It closed at $23.10 on the Toronto Stock Exchange, down $6.80. The stock had already swooned from about $38 over the last month as investors fretted about another poor showing. During a conference call with analysts, Newbridge officials had few answers to pointed questions. "What went wrong and what's going to be done about it?" demanded Brian Piccioni, an analyst with Nesbitt Burns. "I'm sorry, I don't have a simple answer for you," Matthews responded. The company said poor sales for its top-selling switch in North America, its number one market, was the main reason for the shortfall. "That's the first time I can remember that happening," said George Hunt of Wachovia Securities Inc. Later, analysts predicted Newbridge has an almost impossible task to restore investor confidence over the next few quarters. Dave Powers, senior technology analyst with Edward Jones, said Newbridge badly needs some hot products to compete against huge competitors such as Nortel Networks, Lucent Technologies and Cisco Systems. "I think for Newbridge investors, this is a bad dream that's turned into a nightmare," he said. Paul Sagawa, an analyst with Sanford C. Bernstein & Co., said the poor showing once again revives speculation that Newbridge must merge with a bigger rival to realize shareholder value. "I see it getting a lot worse before it gets better," he said. "After a while, the lack of credibility that has been evident in the investment community for a while will spread to its customers." Matthews refused to discuss possible mergers. Pearse Flynn, the company's European lieutenant who takes over from Lutz as president, said the company will move swiftly to restore confidence. "I don't want to put out a promise that this is going to take ages," he said. "It will take a number of actions on a number of fronts. We will make the tough decisions and sound decisions as we go." Matthews said the company is moving quickly toward introducing switches that will handle broadband data and video traffic, which he said will help restore Newbridge's strong position in the marketplace. The new products will boost revenues, but not until after the end of this fiscal year. "I'm not walking around with my head hung low and all glum," he said.