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

To: Glenn McDougall who wrote (14612)	11/16/1999 7:52:00 AM
From: Glenn McDougall	Respond to of 18016

Newbridge losing ground to U.S. rival By KEVIN BELL, Ottawa Sun A CRITICAL week for troubled Newbridge Networks Corp. began yesterday with a revelation that the company is losing market share in the U.S. As the Newbridge board of directors prepares to hear management's ideas on how it will dig itself out of a deep hole, the company has told some analysts that a gap in its product line has allowed rival Lucent Technologies to steal key U.S. contracts for Newbridge's specialty ATM switches. "We have had indications from management that they've lost market share to Lucent because their 50-gigabit box is not available for shipping," said Rob MacLellan, an analyst with CT Securities. "We think the company is very seriously exposed." Chairman Terry Matthews told analysts Nov. 2, when the company reported it will fall short of profit forecasts, that Newbridge expects to ship the new high-capacity switch within the next three months. The admission of lost market share comes at the same time that the rumour mill has been working overtime about a possible takeover bid from Alcatel SA of France or Sweden's L.M. Ericsson Telephone Co. Inc. "That kind of admission doesn't do anything for your negotiating position," MacLellan said. "It's not an admission that a company normally makes." Newbridge spokesman John Lawlor said it's possible Newbridge is losing contracts to its competitor for high capacity switches, but the firm will make up lost ground once its 50-gigabit switch hits the market. "I would probably call it a pause as opposed to market share," he said. But George Hunt, an analyst with Wachovia Securities Inc., said Newbridge's lost share could be significant. Lucent officials informed him last week that it expects sales of its ATM switches will grow by 30% to 40% a year. "The numbers wouldn't add up for Lucent to gain that much without Newbridge losing market share," he said. "Either Newbridge is losing market share or they're not in bids that Lucent is winning. I would suspect that it's a little of both." Meanwhile, Newbridge's board will meet Wednesday and Thursday to hear management's ideas on the prospects for the company. Discussions could include possible downsizing or whether it will put itself up for sale, an insider said. "I can almost guarantee the board will not hear anything about a takeover bid," the source said. Alcatel denied yesterday it is interested in Newbridge. Newbridge shares closed at $29.50, down $1.90 on the Toronto Stock Exchange.