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

To: Doug who wrote (4699)	3/17/1998 12:35:00 PM
From: Bosco	Read Replies (1) \| Respond to of 6980

Dear Doug - yes, I agree (re: critical support.) I am not a trader, much less BAY, but I ve to echo others: it is a trading vehicle. Rgds Bosco

To: Doug who wrote (4699)	3/17/1998 1:20:00 PM
From: bayhead	Read Replies (1) \| Respond to of 6980

Echo....Soundview, Cowen & Oppen decide to reduce on the same day??? **** 07:37am EST 17-Mar-98 CIBC Oppenheimer (Martin Pyykkonen) BAY BAY: Downgrading to Hold [FirstCall Notes 03/17] CIBC Oppenheimer March 16, 1998 Networking Bay Networks Martin Pyykkonen (415)-434-5870 Downgrading to Hold Investment Conclusion We are downgrading Bay Networks to a Hold Rating: HOLD rating. Based on bookings trends in the BAY-NYSE(3/13/98) $27 current quarter (March, 3QF98) we are 52-week $42-15 downgrading the stock to Hold from our Shares Out 225 Million previous Buy rating. We believe the Float 212 Million Shares company's book-to-bill for the current Market Cap $6.1 Billion quarter will be less than 1.0x. We also Div/Yield Nil/Nil estimate that the book-to-bill ratio for the Fiscal Year June Accelar family will be about 1.0x. In both Book Value $6.50 per Share cases, book-to-bill in the short term is FY 1998E ROE 16.8% below our earlier expectations. LT Debt $99 Million Preferred Nil We are reducing our revenue and EPS Com Equity $1.5 Billion estimates for the current quarter. Our revised revenue estimate is $630 million (vs. $670 million previously) and our revised EPS estimate for the current quarter Earnings per Share Prior Current is $0.21 (vs. $0.28 previously), excluding FY 1997 $0.59 $0.60 non-recurring charges. We have also modestly FY 1998E $1.09 $1.01 reduced our EPS estimates for future FY 1999E $1.59 $1.51 periods, from $0.33 to $0.31 in 4QF98 (June) and from $1.59 to $1.51 in full year fiscal P/E Ratio 1999. FY 1997 45.8X 45.0X FY 1998E 24.8X 26.7X The near term reduction in our outlook is FY 1999E 17.0X 17.9X caused by a slower near term ramp in the new Accelar family and continued deceleration in the company's older product lines, namely shared media hubs and routers. We expect the Accelar family to generate $40-$60 million Company Description: in revenue in the current quarter, which Bay Networks provides switches, along with book-to-bill at about 1.0x is routers, hubs and remote access somewhat below our expectations. We estimate equipment for networking that shared media hubs and routers will applications. decline sequentially in the current quarter. We still believe in Accelar's potential to drive strong growth in the year ahead for the company. We view the current slow ramp in Accelar to be related to some hesitancy from large corporate accounts as it is fully evaluated and possibly due to the time required for indirect channel partners to be fully effective in selling the product. We will consider revisiting our rating on the stock as Accelar bookings develop over the next few months. Our quarterly EPS estimates are shown below. 1 Qtr. 2 Qtr. 3 Qtr. 4 Qtr. Year FY 1997 Prior $0.25A $0.10A $0.10A $0.15A $0.59A FY 1997 Actual $0.25 $0.10 $0.10 $0.15 $0.60 FY 1998E Prior $0.22A $0.27A $0.28E $0.32E $1.09E FY 1998E Current $0.22A $0.27A $0.21E $0.31E $1.01E FY 1999E Prior $0.35E $0.39E $0.40E $0.45E $1.59E FY 1999E Current $0.34E $0.37E $0.38E $0.42E $1.51E ==============================================================================