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

To: George A. Roberts who wrote (4447)	3/7/1998 3:48:00 AM
From: rupert1	Read Replies (1) \| Respond to of 6980

George: Thanks for the post. Could you give the source publication, please? I did not know about the David Rynne comments at the Goldman Sachs meeting "hoping" for a back-end loaded quarter. I can see how these comments provide fertile ground for "fretting". If Bellace of Merrill Lynch is correct that 50% of quarterly revenues have to come from March, then I can see why the company cannot be categorical about its quarterly performance. Such a large proportion of sales leaves scope for an earnings shortfall or a positive earnings surprise. Presumably, though, the company has a good idea now about the orders that are in the offing and being processed. It is interesting that ML gives a positive recommendation. Does anybody have an opinion on the 50% figure? The statement that there was a rumour of a profit warning confirms some of the reasons for the negative tone - I would not be surprised if the "rumour" was no more than the Michael Murphy mention I referred to in my posting. He mentioned several companies that might be candidates for a profit warning, including 3COMS; he did not give a sophisticated analysis and with respect to BAY simply reiterated what we already know about the cautions expressed by House and some analysts about the rate of product transition this quarter. Other than the focus for anxieties provided by Rynne, if he has been correctly reported in context, there is nothing new. The article reflects the normal uncertainties that are built-in to the situation, as described in my previous post. It is difficult to assess the bottom-line effect of these kind of comments on the share price. Whether there is enough in them to pressure the stock more than it has already been pressured, or whether they will dissipate with the next positive announcement from the company or from a brokerage house. Obviously, news from 3COMS and CSCO will also affect the mood. But the next big event will be BAY's successfully negotiating the warnings season without warning, and this remains the most likely outcome for all the reasons given, and then earnings, themselves. If BAY is to warn, then it is much more likely that it will do so in the third or fourth week of March. Such a warning would be softened by the near universal view that the June quarter will be very strong. of course, if BAY meets expectations this quarter, anticipation of the June results will ignite the share price, IMHO> Victor