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

To: Ashley Campbell who wrote (45171)	4/22/1998 9:38:00 PM
From: hitesh puri	Read Replies (1) \| Respond to of 61433

Cisco Hits Potholes in Its Push Into the Phone Carrier Market By Kevin Petrie Staff Reporter 4/22/98 7:05 PM ET Cisco's (CSCO:Nasdaq) campaign into the phone carrier business looks like it's hitting resistance. AT&T (T:NYSE) Wednesday confirmed that a Cisco switch played a part in a widespread network outage last week. The company lauded Cisco for helping fix the problem and stressed that the dominant networker won't lose AT&T's business. But a spate of recent events shows that even the seemingly untouchable Cisco, which mainly supplies computer networking equipment for companies, can hit potholes, especially when it comes to serving demanding carriers. Early this month, GTE (GTE:NYSE), a Cisco stronghold, selected products from Cisco rival Ascend (ASND:Nasdaq) for a new data network. This week Qwest (QWST:Nasdaq) gave a lucrative slice of its business to Ascend as well as Cisco. Other recent Ascend contracts include Williams (WMB:NYSE) and LCI (LCI:NYSE). Cisco didn't return a phone call. Ascend's treasurer, Bernie Schneider, said, "I would be very surprised if we're not [gaining market share], based on the wins we've gotten." Still, it has long been a losing proposition to bet against Cisco. This year alone the stock has climbed 30% to record highs. Overall, Cisco is waxing strong while rivals like 3Com (COMS:Nasdaq) and Bay Networks (BAY:NYSE) are struggling. Big shareholders say running a scorecard of recent contracts shows little. And it's unclear whether Ascend really is stealing market share or just winning business in a growing market. But Cisco trades at a steep 58 times trailing profits, putting the stock on a precarious perch. Carriers represent "one of the areas I would definitely question the company on," says noted analyst Bill Rabin at J. P. Morgan. Still, Rabin remains a bull on the stock. His firm has not done any recent underwriting projects for Cisco or Ascend. On Wednesday Cisco stock slipped 3/16 to 73 5/8, while Ascend tacked on 5/16 to close at 43 11/16. Cisco's market capitalization of $75.2 billion easily tops Ascend's $8.3 billion value. Cisco is expected to report earnings in early May for its April quarter; a First Call consensus predicts 44 cents per share. Ascend is Cisco's only major rival that has looked strong lately. On April 9, Ascend topped estimates by a penny and reported first-quarter profits of $52.4 million, or 26 cents per share, on revenue of $305.1 million, compared with a net loss of $163.2 million, or 88 cents a share, on revenue of $292.7 million one year earlier. The company has recovered from the fallout of a buggy software product for Internet service providers last summer. The switches both companies sell use two technologies, asynchronous transfer mode, or ATM, and frame relay -- both of which enable carriers to dislodge bottlenecks of data and multimedia traffic deep within their networks. Cisco and Ascend gained chips in this game through acquisition. In July 1996, Cisco snapped up the private ATM company StrataCom. About a year later Ascend sealed its merger with Cascade, whose frame relay and ATM wares are pulling the company's wagon today. Cisco had its chance with Cascade -- in late 1993 the two paired to develop products. Cisco has devoted big resources to unseating Ascend and the Canadian networker Newbridge Networks (NN:NYSE) from prized ATM accounts. It did wrest a piece of US West's (USW:NYSE) business from Newbridge in late January, but some pros say Cisco has taken a third seat in the market. "You kind of question: Where is [Cisco's] StrataCom?" says analyst Scott Heritage with UBS Securities. Yet he rates Cisco a buy, partly because StrataCom accounts for only a small portion of revenue, although it does represent significant opportunities down the road. UBS is not an underwriter for Cisco or Ascend.

To: Ashley Campbell who wrote (45171)	4/22/1998 10:47:00 PM
From: Todd DeMelle	Read Replies (2) \| Respond to of 61433

OT I have a confession to make too... I'm hoping airing it out will make me feel better like Gary H. I tried my first daytrade today. I bought THQI at 33 5/16... hoping to catch a few points of its meteoric rise... just before it plumetted to 26. sigh. I thought when you beat earnings estimates by huge margins, you're supposed to go straight up. Of course I should know better. To make an unenjoyable experience even less enjoyable (cringe), as the perspicacious among you may know, the trade was on margin. Of course, I should know better. I have decided to be a bit more conservative before... well, before something REALLY bad happens. I placed market orders this evening which will sell a portion of my portfolio sufficient to cover my margin debt (including 40% of my ASND position which, on a bright note, I refrained from selling at 36). I think I'll feel better if THQ bounces tomorrow. I'm holding onto all of my new shares. Todd