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Technology Stocks : COMS & the Ghost of USRX w/ other STUFF -- Ignore unavailable to you. Want to Upgrade?

To: Moonray who wrote (13879)	3/17/1998 7:29:00 PM
From: jim bender	Respond to of 22053

From WSJ: Bay Networks Warns Investors About a Slip in Its Revenue An INTERACTIVE JOURNAL News Roundup Bay Networks Inc. warned investors late Tuesday that it expected revenue and net operating income for its current period to trail the previous quarter's results, confirming fears that had circulated in the market for weeks. The Santa Clara, Calif., network-equipment maker said it expected third-quarter revenue to be down approximately 10% from $645 million in the second quarter, although the company said revenue should be "meaningfully" higher than the $513 million recorded in the year-ago quarter. Bay cited weaker-than-anticipated demand in many of the company's customer segments, adding it believes the shortfall in demand is the result of "a number of transitions underway in its markets." Bay also said it expects to take a charge of approximately $154 million, or 67 cents a share on a diluted basis, for in-process research-and-development charges related to the acquisitions of New Oak Communications Inc. and Netsation Corp., both of which were completed during the period. Bay said it expects to be profitable "on an operating basis" for the period. Worries that Bay would make precisely the announcement it did had tripped up its stock in recent weeks and led number of analysts to lower ratings and earnings estimates. On Tuesday, CIBC Oppenheimer analyst Martin Pyykkonen moved the network-equipment maker to a "hold" rating from "buy," while SoundView Financial Group Inc. analyst Michael Karfopoulos lowered his earnings estimate for the company to 25 cents a share from 30 cents. Analysts and industry experts had pointed to a combination of factors, including competition from industry leader Cisco Systems Inc. and seasonal softness. They also noted that Bay's new Accelar high-performance routing switch -- a next-generation product that began shipping in December -- appeared to be missing some of Wall Street's ambitious growth targets. In his research note, Mr. Pyykkonen said the company appears to be facing a "slower near-term ramp in the new Accelar family" coupled with a "deceleration in the company's older product lines, namely its shared media hubs and routers." As a result, he lowered his quarterly estimate to 21 cents from 28 cents and said he expects the company's book-to-bill will be less than one. The Accelar family will see a book-to-bill ratio of about one, he said. A book-to-bill ratio compares orders with shipments; a reading above one shows that orders are coming in faster than shipments are going out. In his research note, Mr. Karfopoulos also cited Accelar as a reason for his revision, blaming its slow adoption rate. Bay, for its part, said it was "increasingly pleased" with how the Accelar line was received as the quarter progressed. The company said it expected a sequential increase in Accelar revenue in the fourth quarter, adding that the period would also see the introduction of several new products. Bay's shares have slumped steadily since late February when they traded as high as the mid-30s. On Tuesday, the stock fell $2.6875, or 10%, to $26.6875 on the New York Stock Exchange in heavy trading. The announcement came after the close of trading