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Non-Tech : EARNINGS REPORTING - surprises, misses & more -- Ignore unavailable to you. Want to Upgrade?

To: 2MAR$ who wrote (357)	10/20/2000 7:31:14 AM
From: 2MAR$	Read Replies (2) \| Respond to of 762

Terayon Plunges After CEO Says Sales Growth Will Slow Santa Clara, California, Oct. 18 (Bloomberg) -- Terayon Communication Systems Inc. shares lost half of their value after the chief executive of the No. 2 cable-modem maker said sales growth will slow. The stock fell $20.75 to $20.25 in late trading of 17.7 million shares, more than 10 times the three-month daily average. The decline erased about $1.3 billion in market value. The shares earlier touched $19.81, the lowest since last October, and have dropped 86 percent from a record $142.63 in March. During a conference call yesterday to discuss third-quarter results, Terayon Chief Executive Zaki Rakib said revenue growth ``will be more limited'' and higher costs of components and expenses from acquisitions ``may impact near-term results.'' He wasn't more specific. ``They've taken a really conservative stance to the fourth quarter,'' said W.R. Hambrecht & Co. analyst Tim Savageaux, who rates Terayon a ``strong buy.'' ``Obviously (Wall) Street doesn't like where the bar has been set here.'' In earlier quarters, management at Santa Clara, California- based Terayon has told investors to expect sales to rise 15 percent to 20 percent from the previous quarter, and it has exceeded analysts' sales forecasts, Savageaux said. Sales Rise 36% Terayon's third-quarter sales rose 36 percent to $125.3 million from $92 million in the second quarter. Savageaux expects fourth-quarter revenue of $131 million. The company was expected to earn 10 cents a share in the fourth quarter, the average estimate of seven analysts polled by First Call/Thomson Financial. Savageaux cut his fourth-quarter profit estimate to 5 cents a share from 10 cents, while Lehman Brothers analyst Steve Levy slashed his forecast to 6 cents a share from 11 cents, largely on the acquisition expenses. Terayon has passed Nortel Networks Corp. and Com21 Inc. and now ranks behind Motorola Inc. in sales of high-speed modems for Internet access over cable-TV lines, according to researcher Dell'Oro Group. Terayon is No. 2 to Cisco Systems Inc. in sales of corresponding ``head-end'' gear used by service providers to handle the Internet access, Dell'Oro said. Terayon's biggest customers include Shaw Communications Inc., Rogers Communications Inc., United Pan-Europe Communications NV and Sumitomo Corp. Earnings Estimates ``Given our cautious approach at this time, we would definitely encourage investors to look for results to be in line with the current full year public consensus expectations,'' Rakib said. Terayon was forecast to have sales this year of about $401 million, based on the average estimate of six analysts polled by IBES International Inc. Savageaux boosted his 2001 forecast to $690 million from $683 million. Chief Financial Officer Ray Fritz said today in a telephone interview that customers aren't slowing purchases. He defended Terayon's sales growth. ``Suppose we end up at $400 million in revenue for 2000,'' he said. ``That's a hell of an accomplishment over 1999,'' when revenue totaled $97 million. ``I can't control the stock price.'' Oct/18/2000 15:22 ET For more stories from Bloomberg News, click here. (C) Copyright 2000 Bloomberg L.P.