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

To: blankmind who wrote (1171)	2/12/1998 5:14:00 PM
From: Maverick	Respond to of 1629

ASND Forbes article, part V Spare a dime, brother? By Michael Noer what difference can a dime make? Billions of dollars. Last September, Ascend Communications (ASND) posted third-quarter earnings of $0.20 per share, about 11 cents short of analysts' expectations. Bad mistake. Wall Street likes companies with predictable earnings and steady growth. Ascend failed on both counts, surprising The Street with earnings that were 11% lower than the previous year's. Wall Street's punishment was sure, swift and brutal. By November, shares of Ascend had been demolished, trading as low as $22--a long drop for a stock that was worth over $77 a share at the beginning of the year. No surprise then that Mory Ejabat, Ascend's CEO, can think of no higher goal for his company in 1998 than, "to meet the expectations of Wall Street." Wall Street's punishment was sure, swift and brutal. Like almost all companies, Ascend has an internal financial model, which sets targets for gross profits and expenses as a percentage of revenues. With the help of Ascend's new chief financial officer, Michael Ashby, the Digital Tool compared the model with actual results from the third and fourth quarters of 1997. The numbers aren't quite there yet, particularly on the sales and marketing side, but since its abrupt wake-up call last September, Ascend has made significant strides towards meeting its own internal goals. Now if it can just meet the expectations of all those Wall Street fellows for a few quarters in a row. A penny at a time Measure Model 3Q97 4Q97 Gross profits 64% 64.1% 64% Sales & Mktg < 20 24.6 23.8 R&D 13.5 15.1 13.8 General & Admin 3 3.1 2.8 Operating mid 20s 21.3 23.6 profits All numbers are percentages of revenue. Sources: Ascend Communications; SEC filings.