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Technology Stocks : Ascend Communications (ASND) -- Ignore unavailable to you. Want to Upgrade?

To: Mark Duper who wrote (43131)	4/9/1998 1:02:00 PM
From: djane	Read Replies (2) \| Respond to of 61433

thestreet.com article. "At Ascend, Investors Want More Than a Good Quarter" [Article contains new info about Qwest/LCI beta testing/purchases] Excerpt: "If Ascend confirms suspicions that the June quarter is a shoo-in, fund managers awash in cash might push the stock to new levels. "People will pay any amount of money if they believe there's no earnings risk," says Roger McNamee, partner at Integral Capital Partners. By Kevin Petrie Staff Reporter 4/9/98 10:45 AM ET thestreet.com Bulls think Ascend (ASND:Nasdaq) will clear the consensus earnings estimate of 25 cents a share when it reports first-quarter results Thursday after the close. But they want a little more. Since the stock already has tacked on 66% this year, investors also are trolling for evidence that the spring and summer look sunny. Ascend execs have been taciturn since they disappointed Wall Street last year, but there might be plenty to boast about if rumors of big contract wins hold water. Ascend's stock rose 2 3/8 to 40 11/16 on heavy volume Wednesday and was up another 7/16 at 41 1/8 on Thursday. Options activity also reflected bullish trading currents. Shares now trade at 34 times trailing profits, excluding big charges tied to the June 1997 merger with Cascade. Ascend, which makes remote access devices for Internet service providers and large switches for phone carriers, has a market capitalization of $7.3 billion, putting it far behind industry leader Cisco's (CSCO:Nasdaq) $70.2 billion market value. Investors tuning into the conference call Thursday after the close will try to ferret out confirmation of the rumored sales deals, though that may not come this week. The bubbling optimism comes courtesy of Ascend's Cascade division, which builds large "frame relay" and "asynchronous transfer mode" switches for phone carriers and Internet service providers. The talk is that both Williams (WMB:NYSE) and AT&T (T:NYSE) soon will buy plump loads of Ascend product. Both already do business with Ascend. In January, Williams disclosed a $150 million contract for Ascend's ATM and frame relay products; for some time AT&T has deployed ATM gear from Ascend. On Tuesday analyst Al Tobia at NationsBanc Montgomery Securities said in a research note that Qwest (QWST:Nasdaq) and LCI International (LCI:NYSE), which intend to merge later this year, have awarded some business to Ascend. Tobia, whose firm hasn't performed any recent underwriting for Ascend, also upgraded Ascend to buy from hold. A money manager who follows Ascend says Qwest is beta-testing GX550 ATM switches from Ascend and intends to deploy them on its network in the next two years. Officials at Ascend and AT&T declined to comment; Williams and Qwest representatives could not be reached. Research director Mark Yu at the money management firm Norman L. Yu & Co. figures Ascend will meet the consensus of 25 cents per share and $305 million in revenue. He says Ascend has finished digesting Cascade and shifting to new MAX TNT remote access products. Phone carriers are buying bushels of Cascade's ATM products, according to Yu. Yu's firm hopped on the stock when it waited below 30 per share earlier this year. Yu won't say what his firm is doing now, but does say, "We would recommend buying the stock on pullbacks." If Ascend confirms suspicions that the June quarter is a shoo-in, fund managers awash in cash might push the stock to new levels. "People will pay any amount of money if they believe there's no earnings risk," says Roger McNamee, partner at Integral Capital Partners. The warnings from Motorola (MOT:NYSE), Bay Networks (BAY:NYSE) and others have made profit security somewhat rare on Wall Street. McNamee wouldn't say whether he's currently invested in Ascend. c 1998 TheStreet.com, All Rights Reserved. TOP \| ABOUT US \| CONTENTS \| SUBSCRIBE \| ADVERTISE \| TRADE ONLINE \| FEEDBACK \| SEARCH \| HELP