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

To: RFF who wrote (4784)	3/17/1998 10:02:00 PM
From: Frank Ferrari	Read Replies (1) \| Respond to of 6980

I suspect a positive conference call indicating a 1 quarter glitch will help to mitigate the damage, especially considering the drop of the last 2 weeks. My bet is for a sharp dip at the open (23.5) and a recovery from there, probably closing in the low 24's. Above 26.5 within 2 weeks. Any comments? frank

To: RFF who wrote (4784)	3/17/1998 10:05:00 PM
From: Ken Twining	Respond to of 6980

Thread: Just my opinion, but I don't look for a whole lot more downside tomorrow or if there is the stock Will recover. We've already come down from 35 to 24....Fugetaboudit!! This dip will be the one to Buy. IMHO>

To: RFF who wrote (4784)	3/17/1998 10:15:00 PM
From: RFF	Read Replies (1) \| Respond to of 6980

Some more highlights: More Accelar - It seemed like Accelar had a tough time in the mfg ramp - they said it was ramping well though. They said that significant units didn't get shipped out for eval until the end of Feb. So the lack of Accelar rev is not do to a bad mkt acceptance, just push out eval period. There was a joke about having a couple extra weeks wouldv'e made the qtr. I think the big picture they tried to get across was: Seasonal slow down with start of new year + eval of competing technologies = extra couple of indecisive weeks in the IT departments They thought that the Accelar products were doing great in eval and were really going to hit CSCO in the backbone. Said that hadn't been able to compete with them in this area before, but were no on the "offensive" and taking customers. Said they haven't seen a canibalization of other products to to Accelar introduction; actually look like its helping sell other switching products; Expenses - Spending is well under control, under plan right now Expenses will grow slower than revenues next qtr. Inventory - Inventory will be flat - which is good for a slow rev qtr. Working the channel level down Future Growth - Said they have grown faster than the overall industry for the last three qtrs, taking mkt share; expect to return to this growth next qtr. Still see high demand for networking products; mentioned still seeing high "unit" shipments of PCs and servers.

To: RFF who wrote (4784)	3/17/1998 10:28:00 PM
From: WiseGuy	Read Replies (3) \| Respond to of 6980

Overall tone of conference call was positive. Two main reasons cited for 10% decline in revenues: 1) seasonality - companies complete purchase in Dec, so planning in Mar quarter and delay purchase orders. 2) technology transition - too many technology trends confusing. Gigabit spec not in place, Gigabit vs ATM, Modem spec & new standard, switch vs. shared, routers vs. routing switches. Management confidently mentioned Jun '98 quarter to be higher than Dec '97 revenue levels, which would put Bay back into record revenues territory. Management seemed to suggest that Mar quarter was just a blip in the growth scenario. Management believed that previous long-term guidance still in place, i.e., mid 50's GM for FY '99, grow faster than industry, ... Main issue: How much can management be trusted given this quarter's shortfall? How do we know it will not happen again in the June quarter? Positive reasons: 1) Accelar book-to-bill meaningfully more than 1.0. Evaluations expected to convert to revenues. No more MFG constraint. Pleased with customers' reception. 2) Historically strong quarter as customers place order in anticipation of summer. 3) Extranet / VPN switch 2000 & 4000 to ship. Customers pleased with current evaluation. 4) Other unannounced products - new C1000, new BS 350 offerings, new frame offerings, new modules for Accelar. In other words, expect strong new product cycle. 5) BS 350HD 10/100 - GM was effected by 1 pct due to price protection in channels, which was one-time only. Still price leader, does not anticipate price reduction soon, and expect to contribute revenue growth. Last 3-4 weeks have shown increased in revenues, so trend looking good. 6) Management see Bay being clearly on offensive at network center. 7) Technology transitions issue should improve visibility. Negative reasons: 1) Book-to-bill overall expected to be at best 1.0, probably less than 1.0 at March. 2) Currently, demand is weak across all products lines and across all geographies. 3) Competition cited as getting more intense in 10/100 closet. Oddly, conference call now sounded much better than previous ones when Bay had great quarters. Management showed consistency & spoke more clearly, although still didn't provide any breakdown of geographies, which analysts always asked. Still not as specifics as analysts would like. 4 quarters straight of beating estimates. 1 quarter step backwards. Not too bad. I've to say that I'm stung as most of you are. The stock price will depends on how much analysts buy into the Jun quarter story. It sounded 70-75% convincing to me. ptv