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

To: Gary Korn who wrote (33665)	2/6/1998 9:54:00 AM
From: Tim Luke	Read Replies (1) \| Respond to of 61433

Looks like somebody just hit QCOM in the head with a brick.

To: Gary Korn who wrote (33665)	2/6/1998 3:04:00 PM
From: Greg h2o	Respond to of 61433

H&Q Report: sorry, should've sent it sooner (2/4/98) Ascend Communications H Q & ELECTRONIC TECHNOLOGY (ASND/Dec/$30.38) HAMBRECHT & QUIST LLC Joe Noel (415) 439-3609 Notes: a & f SPOT REPORT Reginal King (415) 439-3419 Recommendation: BUY February 4, 1998 UPDATE ON ASCEND Source: MarketMax Ascend Communications is a leading manufacturer of wide area networking solutions for telecommunications carriers, Internet service providers and corporate customers worldwide. Major product divisions include (1) scalable, carrier-class Frame Relay, ATM, IP and Remote Access core switching products; (2) access concentrator product; (3) Enterprise access products and (4) services and support. Estimate Q1 Q2 Q3 Q4 FY `97 Rev-new 292.7A 311.7A 270.4A 292.5A 1167.4A `97 Rev-old 292.7A 311.7A 270.4A 292.5A 1167.4A `97 EPS-new 0.31A 0.31A 0.20A 0.24A 1.07A `97 EPS-old 0.31A 0.31A 0.20A 0.24A 1.07A `98 Rev-new 317.4E 338.1E 358.0E 389.2E 1402.7E `98 Rev-old 317.4E 338.1E 358.0E 389.2E 1402.7E `98 EPS-new 0.26E 0.29E 0.31E 0.34E 1.20E `98 EPS-old 0.26E 0.29E 0.31E 0.34E 1.20E Revenue Estimates in $ Millions Notes: Additional companies mentioned in this report: CSCO Cisco Systems a, e & f COMS 3COM corporation a & f a)Hambrecht & Quist LLC maintains a market in these stocks. e)The analysts covering these stocks have investment position. f) Options are available on these issues. Over the past several days we have had the opportunity to meet with Ascend's management team. Europe: We believe that ASND continues to experience strong re-acceleration of growth in access concentrator port deployment throughout Europe. We expect this trend to continue over the next several quarters. We believe that customer's satisfaction with the planned feature/function upgrades to the TNT will be a key success factor for ASND in Europe over the next several quarters. Asia-Pacific: Overall, it appears that while regional growth may have slowed during the December quarter, nearly no orders were canceled due to the weakened Macroeconomic environment. We expect Japanese customers to continue to push out their orders, 5% of December `97 sales, into the September and December quarters with little to no cancellation expected throughout 1998. It appears that China is beginning to take initial shipments of product. WAN Switching: It appears that similar to the December quarter, sales of ATM related products have continued, as expected, to accelerate thus far during the March quarter. We believe that this strong growth will continue to mitigate the increasing downturn in frame relay sales that we believe ASND continues to experience. Moreover this growth may continue to allow the Company to accelerate divisional revenue growth over the coming quarters. We believe that the new GX550 "Smart Core" ATM platform strengthens the product portfolio and bolsters the already strong sales from the CBX550 platform. It appears that AT&T was a large purchaser of ATM product during the December quarter. March Quarter: Our contacts throughout both the senior and middle levels of ASND's management expressed their high degree of confidence in our current estimates. For the March quarter, we are looking for $0.26 EPS on revenues of $317.4 million. This is an estimate we believe that ASND is likely to meet. For year-end 1998 we remain at $1.20 EPS on revenues of $1.4 billion. Recommendation: We are maintaining our BUY recommendation on Ascend. We would continue to accumulate this stock on weakness.