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

To: Sector Investor who wrote (528)	11/12/1997 11:26:00 AM
From: pae	Read Replies (1) \| Respond to of 1629

Wednesday November 12, 11:00 am Eastern Time Company Press Release Infonetics Report Shows Service Providers Rank Ascend Number One in Both Frame Relay and ISDN Survey Also Shows Ascend Holds Significant Internet ATM Marketshare ALAMEDA, Calif.--(BUSINESS WIRE)--Nov. 12, 1997--Ascend Communications, Inc. (NASDAQ:ASND - news) today announced that the market analyst group, Infonetics Research, Inc., has released a study confirming that Ascend is the worldwide market leader for ISDN and Frame Relay among both regional and large (national and international) network service providers. According to Infonetics, Ascend dominates the worldwide Internet ISDN market with a 69 percent marketshare, and the nearest competitor is a distant 12 percent. Ascend also leads in Frame Relay with 42 percent of the worldwide market; the next closest competitor had only 18 percent marketshare. In addition the report shows Ascend has achieved 23 percent marketshare of the worldwide Internet ATM market. Since the study was released, Ascend has broadened its product offering for Frame Relay and ATM, introducing the GX 550 ''smart core'' ATM Switch and adding multiservice capabilities -- including Frame Relay and IP -- to its CBX 500 ATM Switch. The GX 550 is the first ATM core switch to deliver OC-48/STM-16 speeds with SONET infrastructure capabilities while providing end-to-end Quality of Service, which will to enable service providers to offer sophisticated ATM services directly from the core. Similarly, the CBX 500 ATM Switch enables service providers to respond quickly to market changes by making a broader range of services available on a single platform. At the same time, Ascend also introduced the Navis Family of network management products, including NavisXtend applications, that among other industry firsts, enables service providers to track and bill for services over ATM networks. All of these products and capabilities are designed to enable carriers and ISPs to develop new business services and, a t the same time, provide greater accountability and control over these services. ''One trend we see from ISPs in this high-growth market is that ISPs are trying to differentiate themselves competitively by broadening their services or specializing on a few services,'' said Greg Howard, Director of Service Provider Programs for Infonetics and director of the study. ''The ISP buying preferences highlighted in our study provide valuable insights into what service providers need in order to be more competitive.'' ''This study is especially gratifying for us because it confirms that Ascend is the vendor of choice across all of the different service provider segments, not just the largest carriers and ISPs,'' said Daniel E. Smith, Ascend's executive vice president and general manager, Core Systems Division. ''We will continue to strengthen our leadership in Frame Relay, and we expect to make even greater strides in the ATM and IP space in the coming year with the introduction of new products like the GX 550, enhancements to flagship products like the CBX 500, IP switching through the IP Navigator products, Multigigabit Routing on the GRF Family, Service Access through the SA Family and value-added management products like NavisXtend and NavisCore.'' Ascend Communications, Inc. develops, manufactures and sells wide area networking solutions for telecommunications carriers, Internet service providers and corporate customers worldwide. For more information about Ascend and its products, please visit the Ascend web site at ascend.com, or e-mail info@ascend.com . Ascend is headquartered at One Ascend Plaza, 1701 Harbor Bay Parkway, Alameda CA 94502. Phone 800/ASCEND4; Fax 510/814-2300.

To: Sector Investor who wrote (528)	11/12/1997 1:37:00 PM
From: Sector Investor	Read Replies (1) \| Respond to of 1629

Synopsis of a Research report from Everen issued today Everen states that despite recent declines in Ascend Communications' share price, they continue to rate the common stock an Intermediate Term Market Underperformer with a target Price of $25-$30 and a Long Term Market Performer with a target Price: $33-$37. Based on several internal and external factors, they believe ASND's fundamentals continue to be unstable and they would advise avoiding the stock and using increases in share price as an opportunity to reduce positions. They state that based on the company's third quarter results, recent visit with management, and general industry conditions they continue to see the following issues as a concern over the next couple of quarters: TNT issues: ASND continues to make enhancements to the Max TNT remote access product. While some feature software releases are expected in Q4, the company has just released the TNT in Europe, and will not release it in Japan until Q1 FY98. Remote access revenue accounts for 50% of the total [this was unclear]. Increasing competition: They think that for the first time, CSCO, BAY, COMS, and even SHVA have developed competitive solutions. Furthermore, these new entrants have entered the market at lower prices, placing pressure on revenue growth and margins. These products are just beginning to ship so ASND's ability to maintain its leadership has yet to be seen. ************************************************************ Sector's comment. It's more than prices that are important here, it's the total package - density, product features and interfaces, software service and support and strategic business relationships that win and keep customers. Everen and most other analysts are completely missing this. ASND clearly has the "best of breed" total package, especially at the carrier level, where the growth and large contracts are and is continuing to build strong strategic relationships. *********************************************************** Regarding international growth, Everen states that given the economic unrest in Japan, most companies have lowered their expectation for growth there. Japan currently accounts for approximately 13% of ASND's total revenue. They think that the effects of this downturn could be especially pronounced in Q1 FY98, where Japan's fiscal year-end during this period generally provides a boost to a seasonally soft domestic quarter. They state that furthermore, while some companies are experiencing an uptick in European revenue contribution, it is still, unfortunately, a sluggish market for ASND. Regarding their view of a maturing frame relay market Outlook for the frame relay market growth has declined from 30% growth to a range of 10% to 15% based on price pressure and market saturation. This has had an impact on ASND where frame relay revenue accounts for an estimated 27% of its total revenue. During the third quarter, ASND actually experienced an 8% sequential decline. Furthermore, the company has indicated that it expects price declines of 20% to 30% next year. Everen is projecting this segment to only grow 10% in fiscal 1998. ********************************************************** Sector's comment. I don't see it this way. ASND has taken F/R to OC-12 and (coming) OC-48 speeds - a far cry from the previous 45MB. This is essentially a new market for F/R, especially with the telcos. I think ASND's F/R will do very well here. *********************************************************** Everen's view of management changes, (mainly Ashby and Misunas). They believe that while these moves increase the depth of ASND's management and is a plus, their contributions have yet to be seen. Everen's view of ASND investor confidence. They state that they think one of the worst missteps that ASND has taken was its continued reassurance of product acceptance and earnings outlook, and its ability to react to the numerous and material market changes. From the time of the merger with CSCC, up and until its Q3 pre-release, Everen believes that ASND was overly optimistic relative to the serious challenges it was facing. They feel that ASND's inability to live up to these expectations set by management, hurt their credibility. This clearly places the company in a position to have to prove itself via financial results before the financial community is willing to believe that all of the internal issues and external issues have been successfully addressed. ********************************************************** Sector's comment. I think this is the problem in a nutshell - perception by the investment community. They will require PROOF - in terms of earnings, meetings and new contracts before this stock will move significantly upward. This is a great buying opportunity for us on SI as we can the detailed factors leading to this proof (new products, alliances, etc) on a daily basis. I think we can see this "proof" coming (in Spades, IMO). *********************************************************** Overall, they continue to rate the stock the same based on their perception of an increasing competitive landscape, no resolution yet of internal issues, and lack of confidence in ASND's ability to deliver increasing sequential results. They state that while they have forecasted sequential improvements through the balance of fiscal 1998, they believe Q1 1998 could be at risk to the extent the Japanese economy does not improve. They have adjusted their Q1 FY98 earnings to reflect this potential risk. They would continue to avoid the stock until such time that the company can demonstrate sustained earnings improvements, a stable operating model in the face of increasing competition, and the ability to maintain its leadership position. ********************************************************** Sector's comment. By the time ASND has "proved" this and these analysts come out with their upgrades, ASND stock will no longer be in the $20s or even $30s. *********************************************************** Everen's comments on valuation: Based on the percentage gain Everen's previous targets now represent and the added uncertainty in Q1 FY98, they have adjusted their intermediate term target price downwards to $25 and their Long-term target to $33. They state that this represents a relative multiple to the S&P 500 Index of 1.08 times their 1998 earnings estimates and 1.22 times their 1999 estimates. They believe the ASND's near-term uncertainty warrants a multiple close to that of the S&P 500 Index, with earnings projected to grow only 11% in FY98. Based on ASND's ability to increase its earnings growth to 20% in 1999, they believe its multiple can expand slightly. ********************************************************** Sector's comment. How generous of them. I feel that looking back a year from now, we will label this period as one of the all time great buying opportunities for ASND since the IPO. How many of us will take advantage of it? *************************************************************

To: Sector Investor who wrote (528)	11/13/1997 5:04:00 PM
From: Maverick	Read Replies (1) \| Respond to of 1629

PacBel unleshaes DSL service, Part II The technology will not work on phone lines more than about 2 1/2 miles from a Pac Bell central office, said Paula Reinman, Pac Bell's marketing director for DSL service. The lines also have to be free of signal-processing equipment, such as the load coils used to amplify voices, Reinman said. Pac Bell estimates that 65 percent of the customers in the areas selected for the FasTrack DSL launch will be able to sign up for the service. Those areas are parts of Danville, San Ramon, San Jose, Burlingame, Los Altos, Mountain View, Palo Alto, Redwood City, Santa Clara and Sunnyvale. Residents of these cities can call Pac Bell to find out if their phone lines can support the new service. So far, TCI and its high-speed Internet affiliate, @Home Corp., have launched their cable-modem service only in Fremont and parts of Sunnyvale. But Andrew Johnson, a TCI spokesman, said, ''I think you will see an aggressive deployment of the @Home product (in the Bay Area) between now and the end of the year.'' Before TCI and @Home can begin service in a community, TCI has to upgrade its network to provide a two-way path shielded from electronic interference -- no small task. By contrast, Pac Bell can offer DSL service over its existing wires. Although the theoretical top speed of @Home's service is up to three times faster than Pac Bell's DSL service, in practice the speed can decline as more users sign on. The Pac Bell DSL service will initially be available in two speeds: 384 kilobits per second (Kbps) when subscribers send or receive data, or 1.5 megabits per second (Mbps) when receiving and 384 Kbps when sending. The maximum speed depends on the subscriber's distance from a Pac Bell central office. Those rates are seven to 27 times as fast as a conventional modem's rates. Pac Bell's fees will range from $80 to $250 per month, plus installation fees. Customers using the service to connect to the Internet rather than a corporate network will also have to pay $95 per month to Concentric Network Corp. of Cupertino, the only Internet service provider offering the service at this point. Installation will take about 10 days, Reinman said, adding that Pac Bell had set up a special team to handle orders. The DSL technology is several years old, yet it has been slow to reach the market despite the growing demand for higher-speed access to the Internet. Several companies across the country, including one in Laguna Beach, have been offering DSL service over the copper lines that phone companies lease to burglar-alarm monitoring companies, but Pac Bell has not allowed that tactic in its territory, said Russ Teasdale of InterNex Information Services Inc., a Santa Clara Internet service provider. Nevertheless, Teasdale said, at least two entrepreneurial phone companies are preparing to jump into the DSL business in competition with Pac Bell.