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Technology Stocks : Ascend Communications (ASND) -- Ignore unavailable to you. Want to Upgrade?

To: Gary Korn who wrote (19105)	10/27/1997 1:02:00 AM
From: sepku	Respond to of 61433

Here is the Red Herring's take on LU's aquisition of Livingston. I'll provide the link as well: herring.com But since I have no idea how long this link will remain current, I'm pasting the entire article below... ================================================ GAINING ACCESS Buying Livingston gives Lucent access to the small and midrange ISP market, but the telecom equipment giant has bigger fish to fry. By Dan Mitchell October 24, 1997 Lucent Technologies' recent decision to buy Livingston Enterprises, a maker of remote access products based in Pleasanton, California, should dispel any doubt that the former AT&T equipment division is aggressively pursuing the data communications market. <Picture: [ >Industry watchers had doubted that Lucent -- the descendant of Bell Labs which AT&T spun off along with its NCR computer division in last year's "trivestiture" -- could shake off the AT&T cobwebs in time to move decisively on the datacom market. But those pundits may change their tune as Lucent continues doing deals and expanding further into data networking. Further muffling the negative comments was news this week that Lucent's fourth-quarter revenues, at $6.9 billion, were 17 percent higher than last year. And while the company reported a $579 million loss, most of that was connected to charge-offs for the recent $1.8 billion purchase of voicemail firm Octel Communications. Excluding the charges, Lucent earned $369 million in the final quarter of its first year as an independent company. Lucent paid a hefty premium -- $650 million, about nine times the acquisition's sales -- for Livingston. The privately held company specializes in remote access servers, which give dialup users access to data networks, including the Net. The 11-year-old firm, which had been planning to go public, earned nearly $11 million in 1996. Livingston mostly sells to Internet service providers. For evidence of the growth of that market in the past few years, look no further than Livingston's revenue curve: in 1992, revenues were about $1 million; in 1996, the company took in $48 million. Lucent's customer base consists largely of the regional Bell operating companies (RBOCs) and other big voice carriers. As those companies creep towards data communications, Lucent wants to position itself to serve them. Analysts say that buying Livingston will likely help in that endeavor, but it won't be enough. The big carriers need big iron for their datacom efforts, and "Livingston doesn't really have the products for that market yet," says Brad Baldwin, who follows the remote access market for International Data Corp. To serve its larger customers, Lucent will either have to develop more high-end products -- such as high-capacity routers -- in-house, or else buy another company. In shopping for a remote-access company, Lucent took a pass on big names like Cisco and Ascend, which also happen to be among the biggest makers of high-end network gear. But Lucent may give them another look in the near future -- particularly Ascend, some analysts say. (With Cisco's market capitalization closing in on Lucent's, an acquisition is looking farther out of sight.) Ascend's stock spiked briefly last week when, a day after the Livingston announcement, rumors spread through Wall Street that Lucent was all set to buy Ascend. None of Lucent's top brass could be reached for comment Thursday. Lucent's history, of course, lies in providing gear for traditional voice networks. But while the market for such equipment is growing fast in developing countries, the market is static in the industrialized world. The action now is in datacom, and the bigger carriers and RBOCs will soon provide all kinds of business for equipment makers. "Just in the past month," says IDC's Mr. Baldwin, "I've sat through five presentations by companies going after this market. A lot of brilliant minds are working on the same stuff as Lucent." Livingston is Lucent's biggest datacom investment to date. One year ago, it bought Agile Networks -- which specializes in local area network equipment -- for an undisclosed amount, and it also has taken a stake in Juniper Networks, which has been hyped as a contender for Cisco's crown. For Livingston, the deal was likely far more lucrative than its planned IPO would have been. And the company, the No. 3 player in remote access after Ascend and 3Com, "didn't have a lot of marketing muscle to go after the bigger customers," says Lisa Pelgrim, an analyst with Dataquest. "Lucent will give them that muscle."

To: Gary Korn who wrote (19105)	10/27/1997 8:10:00 AM
From: Sector Investor	Read Replies (2) \| Respond to of 61433

<<If this keeps up this could turn REAL ugly. ASND has held so far, but I expect it to drop another point or so tomorrow. Perhaps the Nikkei can offer some support. I'm not in the mood for ugly.>> It looks like UGLY it will be. S&P futures down $13.30 and we closed about 3 points below fair value, making that a - $16. Europe down big - Germany down over 100 points. Maria says GS says Asian troubles will have only a mild economic impact on the U.S.