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

To: Glenn D. Rudolph who wrote (31393)	1/21/1998 2:56:00 PM
From: Greg h2o	Read Replies (1) \| Respond to of 61433

H&Q Synopsis: ASCEND CLOSES `97 WITH UPSIDE DECEMBER QUARTER Joe Noel January 20, 1998 ASCEND CLOSES `97 WITH UPSIDE DECEMBER QUARTER * ASND reported its December quarter of $0.24 EPS on revenues of $292.5 million, $0.02 higher than the Street's consensus and $0.01 above our estimate. * For the March quarter we are looking for $0.26 EPS on revenues of $317.4 million. For year-end 1998 we remain at $1.20 EPS on revenues of $1.4 billion. * Contributing factors to the better than expected results include strong ATM switching sales, increased MAX TNT shipments, expense containment and a decreased tax rate. * It appears the 56K modem, TNT software and the GRF interoperability issues will be completely resolved during the March quarter. * While we expect additional price cuts towards the middle of FY98, scheduled product enhancements may afford ASND opportunities to better match up their cost reductions with price declines in order to maintain gross margins at the 60%+ level. * We are maintaining our BUY recommendation on Ascend. Currently trading at 26X our revised $1.20 EPS estimate, this stock remains inexpensive, considering the valuations that currently exist within this sector.