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

To: missing who wrote (4776)	3/17/1998 8:28:00 PM
From: Paul Fine	Read Replies (2) \| Respond to of 6980

The following came from DJ Newswire BEFORE the announcement hit. Seems like the biggest disappointment came from Accelar shpts. The question is: What level of confidence can anyone have in Bay being able to hit the aggressive targets next qtr for this line; and is there risk in the overall acceptance of the RS product period? To say that this is only a one quarter "product transition" problem is to assume the product is transitioning! House's statement about a "significant number of EVALUATION units of Accelar out there" says that people are not buying on the come; they want proof it works in their shop. I would guess the big numbers expected for next quarter have to assume that the evaluation period is over and mega-folks will be actually buying the product. If this assumption is premature by even one more quarter, we will get absolutely slaughtered over the summer. Not wanting to be a pessimist, but this is really hard to live through again. DOW JONES NEWS SERVICE BAY NETWORKS SHARES SLIP AS 3Q WORRIES GROW ÿ By Mark Boslet and Joelle Tessler PALO ALTO, Calif. (Dow Jones)--Worries that Bay Networks Inc. (BAY) is struggling to make Wall Street's third-quarter estimates have tripped up its stock in recent weeks. Several analysts have revised ratings or estimates on the company, including two who came out with research notes Tuesday. At CIBC Oppenheimer, Martin Pyykkonen moved the networking equipment maker to a hold rating from buy. SoundView Financial Group Inc. analyst Michael Karfopoulos also lowered his earnings estimate for the company to 25 cents a share from 30 cents. Bay earned 10 cents a share, excluding restructuring and severance charges, in the year-ago third quarter. Bay declined to comment on the stock trading or its third-quarter prospects, saying it was in a "quiet period" in advance of the quarter's March 31 close. But analysts and industry experts say a combination of factors are influencing third-quarter performance, including competition from industry leader Cisco Systems Inc. (CSCO). Equally important, the company's new Accelar high-performance routing switch appears to be missing some of Wall Street's ambitious growth targets. At the end of its second quarter, Bay officials said they planned to increase production of this next generation product, which began shipping in December, to thousands of units in the third quarter from hundreds of units in the second quarter. They also warned that the third quarter overall experiences seasonal softness. In his research note, 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 1. The Accelar family will see a book-to-bill ratio of about 1, he said. A book-to-bill ratio compares orders with shipments with a reading above 1 showing that orders are coming in faster than shipments are going out. Karfopoulos in a research note also cited Accelar as a reason for his revision. The "low adoption rate of (the) Accelar switch as (the) sales cycle is months not weeks" contributed to the quarter, he said. Bay shares have slumped steadily since late February when they traded as high as the mid 30s. Tuesday, the stock was at 26 11/16, unchanged from Monday, on volume of 6.7 million shares compared with average daily volume of 3.4 million. " Well, I've said enough for today. We will see what the market has to say tomorrow. I expect to see over 15MM shares trade minimum. Where it will close is anyones' guess. Paul

To: missing who wrote (4776)	3/17/1998 10:02:00 PM
From: Cisco Fan	Read Replies (4) \| Respond to of 6980

As an investor in Lucent this makes me happy... Now Lucent can buy BAY in a junk yard ;-) Never ever buy second tier player in ANY industry, companies usually become second tier in their industry because they deserve it. I have worked as network design/management consultant in places like Schwab, Bank of America, PacBell and everytime I see Bay sales dudes, they are trying to sale gear based on low price! Where as the Cisco guys come in and sale their wonderful story about end-to-end solution. I have never bloody seen Bay guy trying to ecome strategic vendor... I have never seen a Bay guy stand up and try to poke holes in Cisco's end-to-end story. If anyone wants to go after Cisco they can easily shread Cisco's network management story and have a field day, 'cause cisco's network management products suck and don't hold the end-to-end story. Underneath their blue boxes, boxes that cisco sales are from acquisitions and their is no uniformity for command line, SNMP etc. Which makes task of manageing "cisco only" network as difficult as using gear from multiple vendors.... I lost about $20,000 on BAY year ago, since then decided never to look at this third rate company. So my $0.02 of advice to all BAY investors is dump this puppy and buy some Cisco, Lucent, Ciena if you want to be invested in "networking" companies... Good luck! /Sam