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Technology Stocks : DSC Communications -- Ignore unavailable to you. Want to Upgrade?

To: van wang who wrote (3395)	1/23/1998 3:20:00 PM
From: Paul Lee	Respond to of 4429

anyone have details on conf call--time and ph#

To: van wang who wrote (3395)	1/23/1998 3:58:00 PM
From: Beltropolis Boy	Respond to of 4429

> not too long ago, DIGI was tops on SmartMoney. a curse. if you're interested, here's their spin on the sale: smartmoney.com IF AT FIRST you don't succeed -- sell out. That's the theory DSC Communications (DIGI) -- one of our picks in the red-hot telecommunications equipment sector -- was following Thursday when it announced the sale of its unprofitable fixed wireless local loop business. Local loop -- an upgrade to conventional phone lines that uses a higher quality wireless link -- had developed slowly, burdened by high costs and technological hurdles. As a result, the business had been running at a loss of about $20 million a year, or 15 cents a share, estimates Chandan Sarkar, an analyst at SoundView Financial. "They were losing their shirts on this." Sarkar and other analysts applauded the sale yesterday. The SoundView analyst estimated that the move will reduce DSC's expenses by a dime a share per year. And, Greg Mesniaeff of Robinson Humphrey says, "It's a heavy weight off their chest. I think the company is going to be more profitable now." You'd think that such a move would mean DSC could book a one-time gain for the quarter, but instead the company will take a charge of $17.4 million, or 15 cents a share, to fourth-quarter results to write off costs of depreciated equipment and transfer employees' pensions associated with the sale. The buyers, a syndicate of venture capitalists, will reform the unit as Airspan Communications, and DSC will retain a 20% stake in the venture. Analysts believe that fixed wireless local loop business is bound to boom -- eventually. But the payoff won't be for some years, especially in emerging markets where the technology could be used as an alternative to laying phone wires under ground. When it does turn around, DSC should still reap benefits because of its retained stake in Airspan. Fortunately, it won't have to keep footing the bill for development in the meantime. Analysts aren't boosting estimates yet, but Patrick Houghton, an analyst at Wheat First Butcher Singer says: "The new development gives me higher confidence in the company and my own estimates." DSC is expected to report quarterly earnings of 32 cents a share when it reports after the market's close Jan. 26. -- By Alok K. Jha