Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Jill who wrote (37976)	6/19/2001 4:30:27 PM
From: Sully-	Read Replies (1) \| Respond to of 65232

Tellabs Revises Second Quarter Guidance LISLE, Ill., June 19 /PRNewswire/ -- Tellabs (Nasdaq: TLAB - news) today revised revenue and earnings expectations for the second quarter of 2001. Tellabs now projects second-quarter sales of about $500 million, compared with prior guidance of $780 million to $820 million. Earnings per share for the quarter are now expected to be break even before restructuring and other charges. The dramatic changes affecting the landscape of the telecommunications marketplace have continued to impact Tellabs. Service providers are temporarily able to meet increased customer demand for bandwidth by reallocating capacity within their networks and are only buying equipment to meet the immediate needs of their customers. ``While we continue to see caution from our customers in the pace of equipment deployment, our market position remains intact, and we are focused on ensuring the most profitable path through the current environment,'' said Tellabs President and CEO Richard C. Notebaert. ``I remain confident that Tellabs has the right people, products and strategies to meet the needs of our customers and deliver future growth.'' Simultaneous Webcast and Teleconference -- Tellabs will host a teleconference at 4 p.m. Central time on Tuesday, June 19, 2001, to discuss second-quarter revised revenue expectations. The teleconference number is 212-231-6013. Internet users can hear a simultaneous live webcast of the teleconference at www.tellabs.com . A taped replay of the call will be available for two days, beginning at 6 p.m. Central time, at 800-633-8284. Outside of the United States, dial 858-587-5842. When prompted, enter the Tellabs reservation number: 19161649. In 80 countries around the globe, Tellabs helps the world's leading communications service providers build tomorrow's converged networks of voice, data and video. Tellabs employees design, build and service optical networking, broadband access and voice-quality enhancement equipment. Today most telephone calls and Internet sessions in the United States flow through equipment from Tellabs ( www.tellabs.com ). Forward-Looking Statements -- This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding expected revenues and earnings per share. These forward-looking statements are based on currently available information and involve certain risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may differ materially from those expected. Factors that might cause such a difference include, but are not limited to, risks associated with the size and timing of product sales, customers' equipment deployment plans and budgets, new product acceptance; industry capacity; competitive products and pricing; manufacturing efficiencies, and economic changes impacting the telecommunications industry. For a more detailed description of these and other risk factors, please refer to the company's 10-K, 10-Q and other SEC filings. The company undertakes no obligation to revise or update these forward-looking statements to reflect events or circumstances after today or to reflect the occurrence of unanticipated events. Tellabs and Tellabs logo are registered trademarks of Tellabs or one of its affiliates in the United States and/or other countries. SOURCE: Tellabs biz.yahoo.com Ö¿Ö

To: Jill who wrote (37976)	6/19/2001 7:59:16 PM
From: SecularBull	Read Replies (1) \| Respond to of 65232

Storage: The Short and the Long of It By Monica Rivituso, SmartMoney.com - Stock Watch EARLY TUESDAY MORNING, Salomon Smith Barney analyst H. Clinton Vaughan issued a note cutting his growth estimate for the data-storage industry. The move knocked 2% to 3% off the stocks of three of the industry's top companies: EMC (NYSE:EMC - news), Network Appliance (NASDAQ:NTAP - news) and Brocade Communications (NASDAQ:BRCD - news). No surprise there. With the exception of a brief rally in April and May (along with the rest of the technology sector), the three companies have been market whipping posts for much of the past year. Since last fall, when EMC, Network Appliance and Brocade each hit 52-week highs, they've plunged 75%, 91% and 73%, respectively. Salomon said to expect revenue growth of 10% to 15% this year, not the 15% to 20% the firm had been talking about earlier. And that was enough to bring out the knives anew. So what, you say? We know: Analyst warnings and downgrades are a dime a dozen these days. But we draw your attention to this one because it illustrates a key point about technology investing in this environment. When sorting through the rubble that used to be the towering technology sector, it's always important to remember one thing: You have to distinguish between real trouble in an industry and problems brought on by the broader economy. Consider that while data storage may be undergoing a growth slowdown due to the overall sluggishness of the GDP, the group still has relatively healthy fundamentals. Contrast that with the telecom-equipment business, where a huge inventory overhang and massive broadband overcapacity haven't only slowed business for companies like JDS Uniphase (NASDAQ:JDSU - news) and Cisco (NASDAQ:CSCO - news) to a crawl but have clouded the future miserably. Yankee Group analyst William Hurley notes that the telecom business is plagued by the sale of used equipment on the secondary market. By contrast, he says, there isn't a huge amount of storage equipment being resold, which indicates that there's still a balance between what customers are buying and what they need. ``As information continues to grow at a rather rapid rate, information storage needs to keep pace with that,'' Hurley explains. ``But because it's a buyers' environment, there have been some rather fantastic deals cut [for equipment].'' What he means by a ``buyers' environment'' is that customers of companies like EMC and Network Appliance have had the upper hand at a time when economic sluggishness has slowed overall spending. With the vendors anxious to cut a deal — any deal — buyers can exact better prices and more aggressive terms. So even if customers are still buying equipment, the near-term ride for this industry will likely be a bumpy one, according to Salomon's Vaughan. He thinks the quarter will be another that's ``plagued with preannouncements and downward revenue, margin and EPS revisions.'' He predicts deteriorating economic conditions are going to continue to affect the fundamentals of storage makers in the upcoming months and make for a ``tough'' summer. That said, however, Vaughan's overall outlook is still encouraging — something we think Wall Street is ignoring. Vaughan said he thinks the industry's long-term growth rate will again rebound above 20% when the economy improves. There's no lousy execution or weak management to worry about, he insists, only difficult markets. ``We see many storage companies exiting the economic pullback in stronger relative positions due to their management teams' ability and willingness to adapt to current economic conditions and, as a result, take market share,'' Vaughan wrote. There are other bright signs as well. One problem that has lingered for the industry is that traditionally, storage products haven't all worked well together. That meant customers who adopted a smorgasbord of storage equipment might have trouble managing their infrastructure. But Yankee Group's Hurley notes that storage makers are starting to solve some of the interoperability complexities, and that will make it easier for customers to integrate existing systems with new storage solutions. As companies like EMC, Network Appliance and IBM (NYSE:IBM - news) succeed on this front, sales should improve as well, Hurley predicts. ``The fact of the matter is that people have not stopped or slowed their vociferous delivery of emails, power-point presentations, aggregation of databases and the like,'' he says. With all of this in mind, EMC and Network Appliance look pretty cheap at current prices. Based on Tuesday's close, EMC was trading at about 33 times trailing 12-month earnings, versus its five-year average of 57. Network Appliance was trading at 64, versus a five-year average of about 140. Brocade is also off its average, but still trades at a trailing P/E of 99 — pretty pricey in our book. Will these stocks rise from here? There's no telling about the short term. But over the long haul, this beaten-down sector sure looks healthier than the market is giving it credit for.