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Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED -- Ignore unavailable to you. Want to Upgrade?

To: Jim Willie CB who wrote (36396)	4/27/2001 11:37:26 AM
From: edamo	Read Replies (1) \| Respond to of 65232

jimmy...qcom in never-never land...could break either direction, but up is probable...yesterday down was probable, but stabilized to skew the bias to up....not strong in either direction....need to see another cycle, even if short duration... times like these try mens souls....long or short... nothing exciting today....cien great yesterday..even for a couple of points... i sometimes wish there wasn't pre and after market trading...much of the moves occur pre market...and when they do, the day gets boring...

To: Jim Willie CB who wrote (36396)	4/28/2001 11:19:01 AM
From: stockman_scott	Respond to of 65232

SSB is very cautious on CIEN...its not surprising though... ____________________________________________________ CIEN: LOWERING RATING TO 2H FROM 1H--INTENSIFYING COMPETITION >>Evidence of sharply intensifying competition, particularly from pricing, in the long haul market combined with intensifying pressure on capital spending and shifting priorities among the IXCs is making it increasing difficult for CIEN. << >>We have held on to our rating despite the building pressures based on our sources indicating Ciena has been able to buck the trend with solid new contract wins in a tough environment. * We now think even with some new contract success, the margins are at risk and the momentum must eventually trend back toward the industry averages. * Cutting our price target to reflect tougher conditions. << >>We now think the field information may finally be catching up with the theory or at least the conditions have become so harsh, we think its prudent to anticipate it will catch up to Ciena. << >>Yesterday, XO Communications indicated it was cutting its capital spending budget by $2 billion over 5 years and outsourcing to Level 3. XO is an important Ciena customer. We think this action will diminish the revenues to Ciena even though Level 3 is expected to provide lit fibers to XO going forward and will be using Ciena equipment do some of this. << >>While Sprint maintained its full-year capital spending targets $6.2 billion during its most recent conference call, management strongly suggested that they would likely lower this target. Our Telecom Services team has already lowered their forecast for the carrier to $5.5 billion. Sprint provides over 10% of revenues to Ciena. << >>On April 24th, Verizon Communications, a substantial Ciena customer, lowered its 2001 capital spending budget by $1 billion to $17.5 billion. Management stated that one-quarter of the reduction would come from pressing their equipment vendors for better pricing with the residual coming from deferring capital spending projects.<< >>* During Broadwing's earnings conference call, management noted that they only intended to spend an additional $40-$50 million on their optical network in 2001, down from $92 million spent in Q1. Ciena provides Broadwing with long haul transport equipment. We think they are also shifting toward Corvis for this gear<< >>* Qwest, another significant Ciena customer for optical transport, noted that it was cutting its capital spending budget by $300 million to $9.2 billion. Management implied that another downward capex revision could occur later in the year, possibly as soon as the end of Q2. Furthermore, they asserted that the bulk of this reduction was coming from pressuring vendors for price concessions as they were now experiencing a "buyer's market". <<