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

To: Maverick who wrote (785)	12/18/1997 12:42:00 PM
From: blankmind	Read Replies (1) \| Respond to of 1629

Plexus Shocked for 40% The Motley Fool - December 18, 1997 11:53 ASND SLR PLXS JBIL V%MFOOL P%TMF -------------------------------------------------------------------------------- Jump to first matched term December 18, 1997/FOOLWIRE/ -- Neenah, Washington-based Plexus Corp. (Nasdaq: PLXS) was toasted for $9 3/4 to $15 1/4 after the electronics contract manufacturer (ECM) reported it would miss first quarter earnings estimates. After solid results and buoyant guidance from industry leaders like Solectron (NYSE: SLR) and Jabil Circuit (Nasdaq: JBIL) over the past week, this disappointment represents the first sign from an ECM that some of its customers may be selectively "pushing out" orders. The news rippled through the industry, sending shares of half a dozen companies in the industry down as a result. The financial details at Plexus, while disappointing, are not quite as terrible as the share price decline would suggest. Plexus expects to report earnings of $0.21 to $0.24 per share on $93 million to $97 million in revenues. These results are well below the $0.30 EPS that analysts had been expecting, but up from year-ago levels of $0.20 per share on $87.4 million in revenues. On the high end of guidance, Plexus could increase revenues by 11.0% and earnings per share by 20.0% in a disappointing quarter. Plexus blames the shortfall on some customers re-jiggering short-term production schedules. Management was careful to remain optimistic, highlighting their improved margins and the new customers expected to be in full production by the second half of the fiscal year. Plexus gross margins will come in at 11.4%, about 1.5 percentage points above last year due to increasing revenues from its customer engineering services. These gross margins compare with 10.9% at Solectron and 12.9% at Jabil Circuit, the second- and fourth-largest companies in the industry respectively. Plexus also expects sales growth in the second half of the year "to be more pronounced" as several new customers come on stream. One of those customers, Ascend Communications (Nasdaq: ASND), will generate $50 to $70 million in revenues from ATM switches in fiscal 1998 according to Stephens Inc. analyst Steve Bogard, as reported in the September 15th issue of the Electronic Buyers Guide. [NOTE: Plexus was recently profiled in the Fool's Industry Focus 1998 report on Contract Manufacturing.] -- by Randy Befumo