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To: mtnlady who wrote (33715)	10/24/2000 5:01:52 PM
From: Bruce Brown	Read Replies (2) \| Respond to of 54805

Whacked is being much too nice. Good grief, sitting at $50 and it took Cisco to $50 with it. JDSU down about $14, Ciena down $17 as well. Corning down $15 (although they already reported). I guess a few gaps might get filled tomorrow AM. I'm ticked because I can't log on for the Siebel CC. Anybody else able to log in? BB

To: mtnlady who wrote (33715)	10/24/2000 6:18:44 PM
From: saukriver	Respond to of 54805

NT Whacking mtnlady, do you know whether the guidance NT is giving for 2001 revenue/earnings is less than what it has stated previously? Something unexpected clearly happened; purchase accounting and beating earnings estimates by a penny would not seem enough to trigger a selloff. Something unexpected happened. See Message 14651405 quoting: .....``Looking forward to 2001, we expect the overall market to grow in excess of 20 percent. Given our strong market position and industry leading networking solutions, we expect to continue to grow significantly faster than the market, with anticipated growth in revenues and EPS from operations in the 30 to 35 percent range,'' said John Roth............<< I wonder if the 30-35 percent growth was lower than NT had said before. (I think you are going to lose your bet with uf on whether Cisco or NT have better reports. But he is probably so steamed at what NT did to CSCO's share price that he may may forget about it.) saukriver

To: mtnlady who wrote (33715)	10/25/2000 12:03:50 AM
From: EJhonsa	Read Replies (4) \| Respond to of 54805

A few reasons why Nortel's problems are most likely short-term: 1. Nortel displayed tremendous growth in metropolitan optical networking market, with the company reporting over $1 billion in sales from this segment. This was in stark contrast to the weakness shown in the long-haul market, where Nortel's attributing the inventory problems. What's important to note here is that the metro networking market is just beginning to heat up, with 2000 being the first year that metro DWDM deployment are being made on a large scale. Since this market's literally in its infancy, any weakness shown by Nortel here couldn't be attributed to inventory issues. The fact that this market provided explosive growth for Nortel lends more credibility to their justifications for weakness in the long-haul optical market. 2. Assuming that Nortel's problems are related to short-term carriers inventory issues and not industry growth, the companies that manufacture the chips and components that go into optical networking equipment would see no slowdown in growth whatsoever, due to the fact that these companies' products get bought by telecom equipment companies such as Nortel, who in turn sell their products to carriers. If the carriers have short-term inventory problems, this shouldn't affect the buying patterns of the telecom equipment companies. None of the major optical component/semiconductor companies that have reported so far, such as PMC-Sierra, Applied Micro, SDL, Transwitch, and Avanex, have reported any sort of weakness. Nearly all of them, in fact, reported blistering growth. 3. Nortel reported that in spite of near-term weakness in its optical business, shipments of Nortel's optical equipment that were made to carriers increased over 20% sequentially. This is especially remarkable number considering the third quarter is traditionally considered to be a weak one for telecom equipment companies. Obviously, one would expect that normally, a telecom equipment company's revenues would grow in proportion to the the extent to which there was growth in the number of product shipments that were being made related to a company's offerings...unless the company only recognized revenue when actual product deployments are made, and the deployments got held up because customers had inventory issues to work out, in which case the growth in deployments wouldn't be reflected in the company's bottom line for the short-term, but would be reflected once the deployments take place. In Nortel's case, the deployments should take place in the 4th quarter, and it doesn't take a genius to figure out the effect they'll have on the company's bottom line. 4. Perhaps most importantly, Nortel's still expecting over $10 billion in optical-related sales for the year, with an annual increase of 125%-135% in revenues from this market segment. This last number is important to note considering that, although Nortel reported 150% optical growth in the 2nd quarter this year, Nortel reported only limited growth from this business in the 1st quarter, and 90% growth in the last quarter, and that the 4th quarter is by far the largest quarter for telecom equipment companies. This means, that for Nortel to report 125-135% optical-related growth in the 4th quarter as they're forecasting, this business has to see huge growth in this quarter. 5. Last but not least, contrary to what some articles have stated, Nortel hasn't given any downward guidance going forward. The company's still expecting 30-35% sales and earnings growth for 2001, as they did before, and Nortel actually increased earnings growth estimates for 2000 from the high 30s to the 40s. It should be noted here that Nortel's generally been very conservative about giving forward guidance. For example, in 1999, they guided investors to expect only 25% earnings growth in 2000. Due to these reasons, I'll go on record stating that I think Nortel's problems are short-term issues that should be resolved in the upcoming quarter, much like the issues Nokia brought 3 months ago. Unfortunately, since Wall Street has so often been lied to by major corporations regarding the reasons that they've had sales/earnings weaknesses, they didn't trust Nokia three months ago, and they don't trust Nortel now. However, provided that a given company executes and fulfills its promises, as Nokia did, and as I expect Nortel to do, these problems only turn out to be become blips on the radar long-term. Eric