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Technology Stocks : VTEL: Anyone else follow this? -- Ignore unavailable to you. Want to Upgrade?

To: E_K_S who wrote (912)	2/19/1998 4:31:00 PM
From: Yeadon	Respond to of 1214

Good to hear from you. I listened to the conf call and was not impressed. They expect Q3 sales to be 5% higher than Q2, which I guess would mean 3 or 4C in earnings. Will have to wait until FY1999 to see if merger has any benefits. I would buy if it dips to low 5s. Yeadon

To: E_K_S who wrote (912)	2/19/1998 5:19:00 PM
From: doug doan	Read Replies (1) \| Respond to of 1214

Earnings Better Than I expected.. Nice to see you still around Eric. Here are my thoughts on the earnings. 1. Could have been a lot worse. They did show earnings in an industry that is not profitable. Indeed, prime competitor PCTL is operating well in the red. Asian bug must have really hurt 2. Financial position improved in a tough quarter. 3. My hope (no evidence yet on this) is that they are taking market share away from PCTL on the high end systems. This theory will be confirmed when we see PCTL earnings announcements which I expect to be very bad. 4. If True, VTEL seems to have captured the dominant high end systems. They are about to roll out the low end systems in April, lets hope that can dominate the lowere end soon as well. 5. The additional revenue from services is a real potential. Finally, VTEL has a full service unit based in King of Prussia. I went up there one afternoon and was very impressed. I want to see that end of the business expand. It should. Up till now, VTEL was unable to provide services to customers. Instead customers had to go thru Sprint and the other vars. I like the new system a lot and would be disappointed if we do not see 50% growth in services over the next few quarters as this business line gets established. Obvious big concern is the industry, will VC ever take off? When? Our management has us well positioned but we need some growth in the industry. Frankly as I see additional bandwidth becoming cheaper and more available the unit cost of a VTEL system drops. The last point, is that I follow Govt. Sales alot closer than any other market and I know VTEL has become the de facto Govt standard. More importantly, their Govt sales are growing very nicely. I have doubled my position in VTEL and am increasingly confident in the future.