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To: SteveG who wrote (2313)	1/15/1998 2:27:00 PM
From: SteveG	Read Replies (1) \| Respond to of 9236

<A> ADC Telecom Down 22%; Analyst Cites Less Phone Co. Spending ADC Telecom -2: Bear Stearns Cuts 1Q Net View 3c To 24c/Shr By Nancy Beiles NEW YORK (Dow Jones)--ADC Telecommunications Inc. (ADCT) shares shed 21% Thursday after Bear Stearns & Co. suggested the company may be seeing some fallout from slowed spending growth among telephone companies. ADC Telecommunications, which makes transmission and networking systems, markets its products to phone companies and other network providers. In a research note published Thursday, Bear Stearns analyst Alex Cena downgraded his rating on the shares to attractive from buy, and lowered his earnings estimate for the fiscal first quarter ending in January to 24 cents a share from 27 cents. Cena also reduced his earnings estimate for fiscal 1998 to $1.20 a share from $1.25. A First Call Corp. consensus of 19 analysts indicates ADC will earn 26 cents a share for the first quarter, and $1.26 a share for the year. In the research note, Cena attributed the ratings change to "seasonality in the January quarter not being offset by product mix and new orders," which, he said, may be the effect of reduced spending growth among telephone companies. Cena said telephone company spending growth will likely be in the high single digits in 1998, down from 18% in 1997. Bear Stearns was not alone in downgrading the company's shares. SoundView Financial Group analyst Chandran Sarkar cut his short-term rating on the shares to hold from buy, and lowered his first-quarter earnings estimate to 24 cents a share from 27 cents. Sarkar also cuts his earnings estimate for ADC's fiscal 1998 to $1.20 a share from $1.25. Sarkar, however, upgraded his long-term rating on the stock to buy from hold. ADC Telecom shares recently were trading at 28 7/16, down 7 9/16, or 21%, on Nasdaq volume of 10.1 million. Average daily volume is 984,700. ADC officials were not immediately available to comment. In a research note, SoundView's Sarkar attributed his weaker outlook for ADC to slowed spending among the Baby Bells. With less revenue coming in from the Bells, Sarkar said, it is unlikely that ADC will meet Wall Street earnings estimates for the quarter. Teltrend Inc. (TLTN), which makes transmission products that are marketed to regional Bells, also may see some effects from the Bells' slowed spending, Sarkar said. Teltrend shares were trading recently at 15 3/4, down 3/4, or 4.5%, on volume of 104,600 shares, compared with average daily volume of 44,700 shares.