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Technology Stocks : Vitesse Semiconductor -- Ignore unavailable to you. Want to Upgrade?

To: pass pass who wrote (3262)	1/15/2000 2:01:00 PM
From: SJS	Respond to of 4710

From Jubak on 1/14/00: Source page: moneycentral.msn.com _________________ Text: In my last column, I wrote that I'd be going through the Jan. 10 quarterly earnings report from Vitesse Semiconductor (VTSS) with a fine-toothed comb for signs that changing fundamentals made this one too risky to hold. How did Vitesse do? Well enough to take it off my danger list. The company reported earnings of 14 cents a share, exactly what Wall Street expected, and revenue grew 47% from the same quarter a year earlier. New products suggest that Vitesse will be able to grow sales in new markets such as switching layer chip solutions (20 design wins to date) and storage area networks. Lucent Technologies, the biggest customer for Vitesse, is the only potential fly in the ointment. Sales to Lucent rose 8% in the quarter -- not great, but not bad, either, after two flat quarters. Vitesse management believes that Lucent will solve the production problems that caused it to lose sales to competitors. That will result in 12% to 14% growth in sales to Lucent, Vitesse told analysts. If management is right about Lucent, Vitesse could surprise to the upside in the March quarter. At 102 times trailing 12-month earnings, the company actually lags the price-to-earnings multiples of such competitors as Applied Micro Circuits (AMCC) at 270 and PMC-Sierra (PMCS) at 119. An earnings report next quarter that decisively removed the Lucent problem likely would give the stock's multiple a jump. I think it's worth waiting for. I'm leaving the stock in Jubak's Picks with a price target of $60 for April. Steve