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Technology Stocks : BAY Ntwks (under House) -- Ignore unavailable to you. Want to Upgrade?

To: Beachbumm who wrote (3304)	12/29/1997 2:02:00 AM
From: WiseGuy	Read Replies (2) \| Respond to of 6980

> Paul, I'm very much a BAY bull, but I think your numbers are wildly > optimistic considering that BAY already talked the Street down on > the revenue projections. At 640 millions they would probably book > close to $.30 per share. I think revenue will be 608-615 millions > and earnings at $.26 on the dot. > > But I'm hoping I'm wrong and you're right! > > Beachbumm Beachbumm, I don't seem to recall any specific reference of Bay's talking the street down on revenue projections for the current quarter, except for DLJ's interpretation (from Bay's saying router and shared media will likely be flat) that revenues must be lowered. Other analysts at the meeting thought things were fine. Assuming all products were flat, that would give Bay already a $600mil base to build from. However, I am looking for switching to be strong for Bay; hence, my optimism for revenue growth. Are there any indication that switching will not be strong? I hope you're right that the Street is looking for only $615mil because that will allow room for a surprise. I hope that no ridiculous 'revenue whisper #' will be put out for Bay like last Q. I hate whisper # because they usually cannot be pinpointed to any particular source. I would rather prefer that First Call also offers consensus estimates for revenues in addition to consensus estimates for earnings, and both these consensus #'s be used for comparison. Additionally, I think Dr. House would be very disappointed if Bay could do only $615mil, which is 2.3% sequential growth and is much less than Cisco's 5.9%. It is very important for Bay to show the world that they can grow faster than Cisco consistently. The object for Bay is not only to have good #'s, but to quell the myth "why invest in Bay when there's Cisco". The existence of Cisco is the key reason why I think there seems to be so little support in Bay's stock price-investors can just 'safely' own Cisco (or at least they thought so). Further, 2.3% would be pretty poor guidance that there will be sequential growth for the quarter that is not as much as 11% in Q1. It would be better to not disappoint by saying sequential growth will be in the low single digit or something clearer like that. And more, this would be a golden opportunity for Bay to surpassed 3Com and become the #2 enterprise networking player again. In terms of earnings, it would be extremely difficult for Bay to get any more than 27c because margins would have to go up significantly in order to do that. Just some thoughts from a confident Bay shareholder. Anyway, let's hope for the best. I've had a very good Christmas holiday and I hope Bay will make '98 a great year for all of us. Thanks and cheers to all, Happy new year, ptv