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Technology Stocks : Corvis Corporation (CORV) -- Ignore unavailable to you. Want to Upgrade?

To: Secret_Agent_Man who wrote (752)	4/29/2001 10:47:33 PM
From: Ray Dopkins	Respond to of 2772

The CSFB view - Summary - CREDIT SUISSE FIRST BOSTON CORPORATION Equity Research Americas STRONG BUY LARGE CAP Corvis Corporation (CORV) Delivers Solid Q1:01; Announces Expansion of Q Opportunity; Favorable LT Risk/ Reward at Current Prices Summary Excluding goodwill and intangible amortization charges, CORV posted Q1:01 sales of $84.1M and an EPS of $(0.07), above our $60M top-line and on target with our $(0.07) EPS forecast; Maintain 2001 sales of $320M and decreasing EPS to $(0.21) from $(0.23); Maintain 2002 revs of $550M and increasing EPS to $0.10 from $0.05; Q1:01 in-line in terms of costs/expenses and balance sheet. Relationships with core customers WCG, BRW, and Q continue to strengthen (now selling switching and transport to Q and estimate P.O. of $100M that will begin shipping in H2:01); However, predicting timing of additional customer wins difficult given lengthening selling cycle in current environment; New system intros on track incl. CorWave LR, XL, and XF in H2:01 and alpha version of O-E-O switch by YE. GM guidance reduced significantly reflecting "pay as you go" revenue recognition at customers and increased pricing pressure; We estimate price pressure a function of difficult funding environment and competitor aggressiveness with legacy gear as opposed to commoditization of CORV technology; Mgmt. Responds to this with a dramatic decrease in op. ex (we decreased to $210M from $270M in '01) to maintain H1:02 operating profit objective. As anticipated, Qtrly sales patterning non-linear with a sequential decline ($50-70M in Q2:01) and improvements during H2:01; Change a function of above- plan sales to BRW in Q1:01 and timing of rev recognition (as opposed to shipments) at WCG and Q. CORV shares trading at 3.4x firm value to 2002 sales; Adjusted for $1.91 of excess cash, CORV shares trade at $5.98; Attractive for long-term investors at these levels, recognizing stock in trading range pending new customer announcements; Project CORV will benefit with enhanced LH market momentum given technology position; Reiterate STRONG BUY.