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

To: Bosco who wrote (3683)	1/21/1998 4:20:00 PM
From: jkb	Respond to of 6980

MSFT reports 85 cents as opposed to estimates of 82 cents. Conference call in an hour. -Jay

To: Bosco who wrote (3683)	1/21/1998 4:30:00 PM
From: jkb	Respond to of 6980

January 21, 1998 11:47 AM DOW JONES ONLINE NEWS BAY NETWORKS SHARES FALL AMID WORRIES ABOUT FUTURE EARNINGS Company Search (Enter ticker symbol) (If your don't know the ticker symbol, enter the company name here) Search by Sector NEW YORK -(Dow Jones)- Shares of Bay Networks Inc. fell Wednesday, as investors apparently worried about upcoming earnings. In the wake of Bay's earnings report late Tuesday, three brokerage houses lowered their investment ratings on Bay and two upgraded it. Near midday, Bay's shares (BAY) were down $2.813, or 9.6%, at $26.625. Volume of 3.9 million shares already exceeded the daily average of about 3.2 million. Bay Networks Tuesday reported second-quarter operating income of $59 million, or 27 cents a diluted share, on revenue of $645 million, compared with a loss of $172 million, or 90 cents a share, on revenue of $514 million for the year-earlier period. Analysts surveyed by First Call had estimated Bay would earn 26 cents a diluted share for the quarter. Prudential downgraded Bay to "hold" from "buy," Deutsche Morgan Grenfell lowered its rating to "accumulate" from "buy" and Goldman Sachs cut its rating to "market outperform" from "trading buy." However, Bear Stearns raised its rating to "attractive" from "neutral" and Lazard Freres upgraded its rating to "buy" from "accumulate." Analysts said Bay Networks officials warned that results for its current quarter will be affected by seasonal variables. Meanwhile, Bay Networks Chairman and Chief Executive David House said better products have allowed Bay Networks Inc. to gain market share against larger companies like Cisco Systems Inc., In an interview on CNBC Wednesday, House said that while Bay Networks' (BAY) market capitalization is one-tenth of Cisco's (CSCO), its revenue is one-third of the computer concern's. Bay's strength, House suggested, is evident in its second-quarter earnings. House said 59% of Bay's revenue for the fourth quarter was from new products, which he characterized as either upgrades of existing products or first-time offerings. He attributed the company's strong performance to its range of products. Bay Networks is "coming out with products that better meet our customers' needs, that provide better bandwidth, that allow them to better communicate," House said. He said Bay Networks is the only supplier that offers layer three routing switches. House said the company did well with both European and Asian sales for the quarter, and he minimized the effect of the Asian economic turmoil. "Asia hit our finanical targets and despite the economic problems there we were on our numbers," he said. Asian sales, House said, account for 10% of Bay Networks' revenue. House conceded that the Asian situation has forced the company to scale back its expectations for growth in the region, but he said Bay Networks continues to win new business there. "We're seeing substantial growth in Asia," he noted. Copyright (c) 1998 Dow Jones & Company, Inc. All Rights Reserved.