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Technology Stocks : Stratex Networks, Inc. (STXN) -- Ignore unavailable to you. Want to Upgrade?

To: akmike who wrote (1249)	1/11/2001 2:55:39 PM
From: Rob Preuss	Read Replies (2) \| Respond to of 1762

Mike, Your expectations on gross margins are too high. Here's an excerpt from my Q2FY01 Conference call notes: >Gross Margins Q2 FY01: 31.6% >Gross Margins Q2 FY00: 30.1% >Gross Margins Q1 FY01: 35.2% > >We expected margins to decline from the previous quarter due to product mix, >customer mix, and factory costs we’d incur as we focussed on ramping production. >I’d expected about a 1-2% decrease, however Spectrum II revenues were higher >than anticipated as we shipped additional product to satisfy critical customer >needs. In addition, we incurred additional costs in San Jose and Seattle to >increase production levels and expand capacity. Also margin on service revenue >was lower his quarter as we expanded staffing and increased some of the base >costs in anticipation of a growing service business going forward. I do expect >to see an increase in margins for Q3 of about 1% to 32-33% an another increase >in Q4 to 33.5-34.5%. Although somewhat lower than prior estimates for this >year, we believe our long-term financial model with margins of 36-38% is still >appropriate as the manufacturing process, supply chain, and yield improvement >programs we’re currently working on produce results over the next 12 months. And here's an excerpt from the notes I made following a telephone discussion with STXN's VP of Marketing and Sales: >Shawn confirmed for me that these ultra-high-capacity >products will likely have higher margins than Altium. >Moreover, he felt that the sale of these new products >would NOT cannibalize their Altium sales... they are >more-or-less complementary to the Altium products... >For example: a customer using several Altium or DX-R >radios (e.g., to reach a client's building) might >need 1 or 2 of these higher-capacity products to >carry all that data back to a fiber facility. So >my guess is that, 12-15 months from now, they'll >sell 15 OC12 (622 Mbps) radios and 30 OC6 (311 Mbps) >radios for every 100 OC3 (155 Mbps) radios they sell. I recommend you read all these notes... Q2 FY01 Press Release Message 14600654 Q2 FY01 Statement of Operations: Message 14600667 Q2 FY01 Conference Call Summary: Part I (Financial) Message 14618537 Q2 FY01 Conference Call Summary: Part II (Operational) Message 14623465 Q2 FY01 Conference Call Summary: Part III (Outlook) Message 14631707 Q2 FY01 Conference Call Summary: Part IV (Q&A) Message 14641795 Notes from conversation I had with STXN's VP Marketing Message 14715039 Text summary of STXN slide presentation at AEA Financial conference Message 14738594 Rob