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Technology Stocks : Nortel Networks (NT) -- Ignore unavailable to you. Want to Upgrade?

To: Chris O'Connor who wrote (7468)	10/24/2000 7:42:01 PM
From: K. Bloomquist	Read Replies (1) \| Respond to of 14638

Get a grip. Heavy orders in Q2 stuffed customers with inventory as not enough engineers to install. Traditionally slow 3rd Q plus aforementioned resulted in lower 3rd Q Revs. This inventory correction will be taken care of in the 4th Q, which is why they bumped up 4th Q guidance to 40%. 2001 guidance did not change. Those analysts spoke of so disparagingly will clear this up tomorrow. Optical demand is not slowing - this inventory correction has artificially clipped 3rd Q revs. 2nd Q revs were slightly high because of the extra ordering, but investors have been aware of this for months, and the stocks have already corrected for that.

To: Chris O'Connor who wrote (7468)	10/24/2000 7:56:03 PM
From: WiseGuy	Read Replies (1) \| Respond to of 14638

Well, if the report and future was so bad, let's see the analysts go downgrade NT and cut its estimate. I would like to see this happen so that expectations can be set reasonably again and so NT can have opportunities to blow past it later. But given the temporary nature of the problem and the company's guidance for increasing EPS, I would be surprised to see analysts cut estimates. Roth also said the company is close to be sold out for the quarter, so there shouldn't be much lingering uncertainty over revenue and EPS. Is it a slowdown trend for optical sales in general? There's no indication of demand drying out, so I don't think so. The problem appears to be inventory and staffing related, and they seem to be mostly resolved. biz.yahoo.com [[The company said a tight supply of optical systems led several customers to amass inventory, which Henderson calculates was worth $300 million to $350 million. Nortel also said it needs to boost the number of staff it has to install systems. ``The good news is that there's plenty of equipment now for our people to work on now so they're not being held up,'' said chief executive John Roth in a conference call. ``Now we're at the point where the shortages are being removed.'' Nortel said customers have worked through their excess supply and it expects sales to rebound in the fourth quarter, when it is close to being sold out. ]] What has happened is a slight NT miscalculation. Seems like a bump on the road rather than a lingering problem like LU. Wallstreet will be able to tolerate bumps, as long as the bumps don't hint at future problems. I'm really glad that Roth clearly addresses the issues for the revenue miss, giving more confidence that it is purely just a small bump in the road. YES, NT deserves to be punished like a bad child, but NT deserves to be slapped on the butt, not whacked in the face. I think that at this level, smart money will start to move in significantly. However, it is so unfortunate for us little shareholders as most likely we will be forced to resolve margin calls first.