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To: Tom Hua who wrote (1939)	10/12/2000 10:07:30 AM
From: oldirtybastard	Respond to of 19633

GLW also not holding gains from pre-announcing good #'s

To: Tom Hua who wrote (1939)	10/12/2000 10:14:24 AM
From: Oleg Sogolov	Read Replies (1) \| Respond to of 19633

Tom, from Briefing.com this morning: Tollgrade (TLGD) 120 1/4: Sellers aren't giving up their shares of this designer of telecom testing equipment without a fight as TLGD posted Q3 EPS of $0.54, well above the $0.33 First Call consensus. The stock is trading up over $6 in the pre-market. This is becoming a pattern as the company has annihilated estimates for the past four quarters by an average of 70%. Revenues were $29.8 mln, up 122% yoy and flat sequentially - but Q3's top line is always lower than Q2 as Q3 is seasonally a weak quarter....But it's not all good news as the company believes Q4 sales could be flat with Q3 and Q2 as the lumpiness in the business is dissipating. This would result in yoy Q4 growth of 33%, which would be considerably lower than the 107% yoy growth averaged over the past 4 quarters. Also, margins could narrow slightly in Q4 if its DigiTest activity with its partner companies, such as Nortel (NT), increases in Q4 as business to OEM's (original equipment manufacturer) is lower margin than direct sales....As for this quarter, while many expected the upside EPS surprise, we don't believe the higher margins were anticipated. Gross and operating margins were 63.6% and 36.0%, a big increase over the 54.9% and 20.1% achieved last year thanks to higher sales and an improved product mix. To provide a sense as to what this does for the bottom line, the higher operating margin alone added $0.23 to the EPS line vs last year. The company is in a strong financial position as it is not only cash flow positive, but EPS positive as it is expected to earn $1.86 this year with no long term debt....While it's more likely to get a sympathy rally with a pre-announcement than an upside earnings surprise from a company like Tollgrade, but we could see others move....Sunrise Telecom (SRTI 17) is a recent IPO without a lot exposure that's in the same space as TLGD that could move. It also has news of its own out this morning: introducing a new analyzer which for the first time allows technicians to test cable modems. Other companies with exposure to telecom testing equipment include Agilent (A 45 13/16) and Newport (NEWP 127 1/16). Fiber-optic equipment testers moving higher in the pre-market include Digital Lightwave (DIGL 59 1/4) and EXFO Electro-Optical (EXFO 36 7/8). -- Robert J. Reid, Briefing.com