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Technology Stocks : Efficient Networks Inc - (Nasdaq- EFNT) -- Ignore unavailable to you. Want to Upgrade?

To: pat mudge who wrote (562)	10/18/2000 6:57:52 PM
From: Herschel Rubin	Read Replies (2) \| Respond to of 675

Re-post of my Conf Call comments on Yahoo: ============================================================== messages.yahoo.com <<Infrastructures are apparently farther along than CPE. So EFNT customers have ports that they need to get revenue from. That means pushing their services, and getting the CPE out there to get those lines in use, which will increase their profits. Is this a correct assumption?>> Absolutely. From what Mark Floyd said, paraphrasing: The market got ahead [of itself] on DSLAM deployment... [In otherwords there are a lot of CLEC's and ILECs out there with DSL capacity they desperately need to fill to get a return on investment] and: "CPE expansion has YET to happen as the DSLAM expansion we saw happen earlier" [paraphrased quote from Mark Floyd from my notes] This is EXACTLY the answer to the question people have been asking today about CMTN's usefulness as a predictor for EFNT's CPE earnings/revenues: THE ANSWER IS NOT USEFUL AT ALL. There is not always a direct relationship, and in this case, the current underutilization of DSLAM's portends well for the CPE sector of DSL. As things stand now, there seems to be overcapacity of DSLAM's at the CO's, hungrily waiting to mop up CPE DSL demand from home/business users, which means MORE demand for CPE equipment. It is my opinion that analysts really need to regard the "DSL Sector" as two sectors: 1) The Central Office side, and 2) The CPE side (consumers & businesses) So much for the so-called "efficient market theory": This share decline today was in fact nothing more than a large misunderstanding of the DSL sector. Tomorrow, the market will attempt to be more "efficient" now that it has more information. ============================================================= messages.yahoo.com Listening to CC right now... by: AlanGreenSpam 10/18/00 5:54 pm Msg: 8816 of 8861 Very upbeat CC... In the Q & A session now. Analysts are saying "Great quarter, guys." Analysts are also complimenting on Gross Margin increase (From 27% in June Qtr to 33% this quarter). Mark just said that he doesn't see any reason to change their gross margin guidance that they expect 40% gross margins in 2001. Have shipped some IAD's in October (market trials, I believe). VoDSL will pick up in the March Qtr and be strong in June Qtr.