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Technology Stocks : Aviat Networks -- Ignore unavailable to you. Want to Upgrade?

To: The Ox who wrote (299)	5/7/2010 3:00:46 PM
From: Rob Preuss	Respond to of 312

Perhaps we can take solace in the misfortunes of our smaller competitors... NOTE: Dragonwave has 36.25 million shares outstanding whereas Aviat Networks has about 60 million shares outstanding. == UPDATE 1-DragonWave stock falls on worry over key customer Fri May 7, 2010 2:42pm EDT * Issues forecast for one quarter, not customary full year * Sees $50 mln in Q1 sales vs expectations of $56-$57 mln * Concern that demand from Clearwire slowing * Stock falls to C$6.30 on TSX, 20-month low By Susan Taylor OTTAWA, May 7 (Reuters) - Shares of Canadian telecoms equipment maker DragonWave Inc (DWI.TO) DRWI.N tumbled more than 20 percent on Friday after it forecast revenue figures that sparked worries about waning demand from its marquee customer. The one-time market darling, whose stock was worth more than C$14 just four months ago, was the second-biggest loser on a percentage basis on both the Toronto Stock Exchange and Nasdaq on Friday. DragonWave lost about C$65 million ($62.5 million) in market capitalization as its stock sank to C$6.37 in Toronto and $6.13 on Nasdaq on concern that orders from U.S. carrier Clearwire Corp (CLWR.O), its biggest customer, were coming to an end and won't be replaced by orders from new customers. "That's the raging debate in the stock: Can they do it quick enough? What does their trajectory look like?" said Avian Securities analyst Matt Thornton. "That's really the name of the game, to try and quickly ramp up the other side of the business. It's just very difficult when you've got one customer that's so large, relative to anything else you have in your pipeline." DragonWave, whose microwave radio systems move voice and data between cell phone towers and phone companies' networks, reported its fourth-quarter results after the market close on Thursday. They showed a record 87 percent of the company's revenue in the quarter came from Clearwire, which is expanding its U.S. communications network to reach a target population of 120 million people by the end of 2010. The results were in line with analysts' estimates, but in the report DragonWave forecast sales for just one quarter ahead rather than the typical full year. It estimated first-quarter sales at $50 million, which trails the $56 million to $57 million analysts expected. DragonWave is switching to reporting in U.S. dollars starting in its first quarter. "What's giving people concern is Clearwire may be getting ready to roll off or slow down. And so the question will be just how does the company navigate if there is a change in pace of activity at Clearwire?" said Pacific Crest analyst James Faucette. Clearwire's contribution to DragonWave's fourth-quarter sales was C$55.3 million, a 21 percent increase over the third quarter. Sales from other customers fell 15 percent to C$8.6 million. "These customer concentration situations seldom work out well," said Dundee Securities analyst Tom Astle in a note. The fourth quarter could represent a sales peak for some time, he said. DragonWave has won some new customers -- including new entrants to the Canadian wireless market Globalive and Quebecor's (QBRa.TO) Videotron -- but analysts worry about the pace of growth. There has been speculation that DragonWave could supply equipment for network expansions planned by big U.S. carriers AT&T and Verizon, though several analysts said it looks unlikely. "Most of the activity that Verizon and AT&T are doing right now to improve their network backhaul capacity is being done in metro areas and that's using a lot of fiber," Faucette said. "The question is how much and how soon might they start to upgrade their more suburban and rural segments of their network? And in those cases that's where microwave could be introduced." Several analysts cut their share-price targets for Ottawa-based DragonWave on Friday. Dundee Securities chopped its 12-month target to C$8.50 from C$14.50 and downgraded the stock to "neutral high risk" from a "buy" rating. National Bank Financial cut its target to C$10 from C$14 and Canaccord Adams cut its target to $11 from C$17. ($1=$1.04 Canadian) (Reporting by Susan Taylor; editing by Peter Galloway) == I wonder if AVNW has an opportunity to pick up some of this Clearwire business that Dragonwave appears to be losing? I never understood why tiny Dragonwave got this Clearwire business in the first place... can anyone here tell me? Rob

To: The Ox who wrote (299)	6/30/2010 2:14:30 AM
From: Rob Preuss	Respond to of 312

I'm glad to see Chuck Kissner back in the CEO saddle leading AVNW. I've been long since the 1990's when, as DMIC and under Kissner's leadership, I tripled my investment and bought my mother a house. Braun seemed to be an honest guy that did a lot to help put the AVNW house back in order, but we have not done particularly well at exploiting the huge growth potential that faces us in the wireless backhaul market. Hopefully Kissner can help AVNW better capture that growth potential. ==== 23 June 2010 The global wireless and mobile backhaul equipment market is expected to be worth US$38.0 billion by 2014, growing at an estimated CAGR of 18.7% from 2009 to 2014. Microwave forms the largest market segment and is expected to reach a size of US$16.5 billion by 2014. Asia is the largest wireless backhaul market; and is expected to be worth US$12.2 billion by 2014, accounting for nearly 32% of the total revenues. The Asian wireless backhaul market also has the highest CAGR of 21.8%. mynewsdesk.com ==== Its not a stretch to think AVNW growth can match those CAGR figures. In fact, that's the minimum that I expect. Further, that kind of growth will easily justify a PE of 20. Now its been awhile since AVNW has shown any earnings, but we have a strong balance sheet and I think we should see quarterly EPS of $0.50 once we capture our fair share of the market. That's an annual EPS of $2.00 and, at a PE of 20, a price of $40/share!!! With the current price well below $4/share, that means our AVNW has the potential to be a 10-bagger. I don't think this is far-fetched. That doesn't mean getting there will be either swift or easy. One big problem we've faced has been the terrible state of credit markets. Customers who may prefer to buy AVNW products often are unable to obtain credit from traditional sources. In order to sell their products, some of our competitors (particularly our Chinese competitors) are willing to provide the financing those customers need. Such vendor- financing deals can be highly risky and AVNW should not consider following this approach. However, traditional credit markets are slowly on the mend and AVNW can aggressively help customers access this credit so customers can purchase our products. At the same time, AVNW must continually innovate so that our products continue to offer a superior value proposition; that is, we have to offer products that help our customers build profitable networks.

To: The Ox who wrote (299)	8/12/2010 11:59:33 AM
From: Rob Preuss	Read Replies (1) \| Respond to of 312

RESTRUCTURING PLAN I suppose this was inevitable. They're cutting staff to cut costs to achieve profitability at a lower revenue level. I'd much rather see them reach profitability by growing the top line revenue; this is only 2nd-best. I find this statement encouraging: "Aviat Networks believes that the restructuring will have no long term impact on the Company's ability to generate revenue." I can also sympathize with them when they say "This was a difficult decision for our management team and Board...". I just hope these restructuring efforts do not distract them from their far more important revenue generation efforts. Conference call is at 4:20 PM ET this Wednesday 25 August 2010. Rob ============= Aviat Networks Announces Corporate Restructuring Plan Plan will reduce operating costs and improve business processes SANTA CLARA, Calif., Aug. 12 /PRNewswire-FirstCall/ -- Aviat Networks, Inc. ("Aviat," Nasdaq: AVNW), a leading wireless expert in advanced IP network migration, today announced that it is implementing a corporate restructuring plan to reduce operating costs, restore profitability and establish a platform to drive sustainable revenue growth. The Company expects to realize a reduction in annual spending of $30 to $35 million as a result of a number of actions. In connection with the restructuring plan, Aviat Networks will incur pre-tax restructuring charges currently estimated to be approximately $11 to $13 million related to severance costs as well as impairment of facilities and other assets. The Company expects to record these charges in fiscal 2011. Aviat Networks believes that the restructuring will have no long term impact on the Company's ability to generate revenue. As part of its restructuring plan, Aviat Networks plans to reduce its global workforce and consolidate its global presence by closing and/or relocating select facilities. The workforce reduction will be achieved through severance programs and attrition, with most of the key actions occurring in the first and second quarters of fiscal 2011. Prior to this announcement, the Company had already ceased manufacturing operations in San Antonio, and had begun consolidating operations in India and in China. In addition, the Company is implementing certain changes in its processes designed to enhance responsiveness to customers and to accelerate decision-making. "Our Board has been focused for some time on actions to reduce costs, refocus the product portfolio to match current customer needs, and optimize our business model," said Chuck Kissner, recently appointed Chairman and CEO of Aviat Networks. "The restructuring program that we are announcing today is an important step for the Company as we work to restore profitability and focus our programs to drive sustainable revenue growth. This was a difficult decision for our management team and Board given the significant contributions made by all of our employees in expanding Aviat Networks' presence in recent years. However, the actions we are taking are clearly necessary as we look to improve our business fundamentals and drive shareholder value." "Cost reductions are the first step in improving Aviat Networks' performance. As we look ahead, we will focus on maintaining an efficient cost structure, concentrating on the right product portfolio and optimizing our business model. As we previewed in our prior release, we will discuss the key actions we plan to implement upon completion of our comprehensive strategic plan during our next earnings call. We remain committed to driving sustainable, profitable growth and enhanced shareholder value through innovation and operational excellence," Kissner concluded. The Company will provide more details of the restructuring announcement including the effects on the financial model, on its regularly scheduled earnings call, which it plans to host in late August 2010. All savings and charges indicated in this press release are estimates and subject to change.