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.

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

To: Larry J. who wrote (24310)	11/21/1997 2:36:00 PM
From: Gary Korn	Respond to of 61433

Larry, That was a beautiful, well-reasoned and thoughtful response you just posted on why you believe ASND will jump 25-30%. Just a wonderful analysis. That's why SI is so great. Amazing stuff to be found here. Gary Korn

To: Larry J. who wrote (24310)	11/21/1997 3:14:00 PM
From: Sector Investor	Read Replies (1) \| Respond to of 61433

<< We already know that growing from 270M (Q3 A) - 290M resulted in .03 per share (.20 Q3A - .23Q4E). Therefore, @ 310M revenue, add .03 per share. >> Larry, thanks for an excellent post. I would like to comment that tail-end revenue adds more to EPS than front-end revenue because of fixed or "overhead" costs being a constant, whereas variable or unit costs are part of each sale. For example,ASND's initial estimates for Q3 were for $0.36 on $330 million. Using your numbers if $270M equates to $0.20 EPS and $290M equates to $0.23 EPS then $330M would only come to $0.29 EPS. People don't seem to understand that once your overhead costs are covered, additional revenue only is affected by the variable costs, and hence EPS rises faster. This is another simple reason why a significant upside surprise is quite possible - if the TNT "problems" get resolved and the Europe revs booked before 12/31/97. Right now Mory and company may not be positive of this so they are playing it down, IMO.

To: Larry J. who wrote (24310)	11/21/1997 5:11:00 PM
From: sepku	Respond to of 61433

Excellent post, Larry. I agree, completely. You might also want to throw in a couple pennies that might have been rolled over from the last loser Q. Style Pts.