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To: djane who wrote (46066)	5/5/1998 10:17:00 PM
From: djane	Respond to of 61433

thestreet.com on CSCO report. [ASND references] Excerpt: " Cisco is increasing its business with phone carriers, although the hottest segment has cooled somewhat. Rabin says the company likes its relationship with U.S. West (USW:NYSE), but is not as tight with GTE (GTE:NYSE). Ascend is flexing its muscles in this market after merging with Cascade nearly one year ago. Ascend also has landed business with LCI International (LCI:NYSE). But Cisco intends to recover somewhat with phone carriers through its partnership with Ciena (CIEN:Nasdaq), a supplier of bandwidth-boosting components for optical fiber networks." thestreet.com By Kevin Petrie Staff Reporter 5/5/98 7:49 PM ET Its revenue is bigger than a small country. And that's not the only way Cisco (CSCO:Nasdaq) looks like the Godzilla of networking. After the bell Tuesday, Cisco cleared Wall Street's expectations with earnings of $483 million, or 45 cents per share, in the fiscal third quarter ended April 25, excluding a fat 39-cent charge from acquisitions. A First Call survey had predicted 44 cents. A year earlier, Cisco posted pro-forma profits of $358 million, or 35 cents per share. Sales climbed 33% to $2.2 billion from $1.6 billion. The upshot: A few blemishes aside, Cisco has broadened its product line through acquisitions and gained market share while rivals struggle to maintain their footing. Down the road, Cisco is expected to snap up more small companies that hold the keys to integrating telephone and computer systems. Its future success also hinges on partnerships and agility -- and its moderate approach to ugly markets like Asia. The scorecard so far is strong. Cisco excelled during a tough season, hit growth targets, compensated for challenges with phone-carrier customers and moved product smoothly. Finally, it bolstered gross margins while upping expenses for expansion and dealing with price competition. Cisco climbed early Tuesday, but profit-taking and general market malaise shaved the stock 1 7/16 to 73 5/8 by the market's close. Shareholders value Cisco at $76.3 billion, or 58 times trailing profits. Competitor Ascend (ASND:Nasdaq), whose market cap is $8.3 billion, ended down 7/8 at 42. 3Com (COMS:Nasdaq), with a market capitalization of $12.3 billion, traded 5/16 lower at 34 7/16. Analyst Bill Rabin at J.P. Morgan, who pegged Cisco's number, notes that the April quarter can be stormy because corporations are slow to start spending annual budgets. J.P. Morgan hasn't performed any recent underwriting for Cisco. "What we know from the channel is that the February month was difficult, and that March and April were better," adds analyst Mike Duran with Lazard Freres, referring to checks he made with Cisco's channel of distributors and resellers prior to the report. Duran's firm hasn't performed any underwriting for Cisco. But in a conference call, CEO John Chambers did take a Microsoftian stance in warning about future pressure. The message: Business is great, but Wall Street shouldn't get overly excited about the company's future. "We remain cautious on the industry growth rates over the next 12 to 18 months," Chambers said, partly because of the slightly "surprising" stumbles of Cisco's rivals. And Cisco might miss estimates down the road because shrunken backlogs and shorter lead times make each quarter harder to predict. However, observers say this leaves room for another pleasant surprise. "That's Chambers' way of giving us [positive] body language," Rabin says. He rates the stock buy and intends to raise his price target to $85 or $90 Wednesday. Cisco trades near his current target. Cisco's quarterly revenue growth of 33% achieved the oft-forecasted industry year-over-year growth rate of 30% to 50%. The book-to-bill ratio remained greater than one, which is a positive indicator that products ordered exceeded sales billed. Cisco is increasing its business with phone carriers, although the hottest segment has cooled somewhat. Rabin says the company likes its relationship with U.S. West (USW:NYSE), but is not as tight with GTE (GTE:NYSE). Ascend is flexing its muscles in this market after merging with Cascade nearly one year ago. Ascend also has landed business with LCI International (LCI:NYSE). But Cisco intends to recover somewhat with phone carriers through its partnership with Ciena (CIEN:Nasdaq), a supplier of bandwidth-boosting components for optical fiber networks. Product flow was smooth. Cisco decreased its day sales outstanding to roughly 52 days from about 56. DSOs measure the length of time the average customer takes to pay his or her bill; a decrease is positive. Despite its prior warnings, Cisco somehow increased gross margins once again, to 65.7% from 65.4% in the January quarter and 65.1% in the October period. It did so by paring engineering and production costs. Electronic sales are another lean way to do business: Cisco is booking more than 52% of its orders on the Internet, up from about 41% in early February. Chambers says Asia, now 11% of revenue, will get worse before it recovers. The Japanese might spend some money on networks in the near term, but the mood there is the most pessimistic Chambers has seen it in 15 years. See Also TOP STORIES Cisco Hits Potholes in Its Push Into the Phone Carrier Market 4/22/98 7 PM TOP STORIES ARCHIVE Cisco Company Quotes c 1998 TheStreet.com, All Rights Reserved. TOP \| ABOUT US \| CONTENTS \| SUBSCRIBE \| ADVERTISE \| TRADE ONLINE \| FEEDBACK \| SEARCH \| HELP

To: djane who wrote (46066)	5/5/1998 10:21:00 PM
From: djane	Respond to of 61433

Sidgmore speech to Interop. Tech for Net growth still to come By Tim Clark Staff Writer, CNET NEWS.COM May 5, 1998, 4:45 p.m. PT news.com LAS VEGAS--Predicting a rosy future for the Internet, WorldCom vice chairman and UUNet chief executive John Sidgmore acknowledged that the technologies that will enable the Net's 1,000 percent annual growth--a rate he expects to continue--have not been invented yet. "It is not going to slow down. In fact, it's going to go a lot faster," Sidgmore said in a keynote address at the Networld+Interop trade show today. "This environment is all about speed; it's all about change." But afterwards, Sidgmore said the fundamental technologies on which the Internet is built need to change. "The technology [for Net growth] doesn't exist yet," he added, voicing optimism that the attraction of both financial and intellectual capital to the Net will bring the necessary building blocks online. Sidgmore also warned that expectations of fast, cheap Internet usage may not be realized. "Fast Internet access can't be cheap," he said. "That's a huge expectation problem because the world believes Internet access should be cheap with a $20 or $21 a month model. But the math doesn't work." Users who access content nearby aren't the costly users, he said--it's those who fetch information from distant servers. "We have to make content local for the Internet to scale," he noted. Sidgmore's optimism about continued Internet growth stems in part from his belief that the increases in Internet usage to date have been fueled by new users. "All the new multimedia applications--that's all in the future. When these new applications start to come on, we will see a new level of demand growth that we've never seen before" because multimedia applications demand far more bandwidth than text or graphics, he predicted. Traditional telecommunications firms are jumping on the Internet bandwagon because they fear for their futures if they don't, Sidgmore contended. Half of international phone calls today are in fax transmissions, he noted, which could as easily go over the Net as on traditional voice networks. "What is at stake for telcos is not the niche market but the core business," he said. "That realization made them move. That's why they started buying ISPs. They didn't start becoming cool overnight. They got scared." Go to Front Door \| Intranets \| Search Short takes \| One Week View

To: djane who wrote (46066)	5/5/1998 10:24:00 PM
From: djane	Respond to of 61433

ASND 56k modem v.90 upgrade ready by late 6/98 (from BAY thread) To: JDN (5660 ) From: Jurgen Tuesday, May 5 1998 4:13PM ET Reply # of 5672 Newsletter from my IP -------------------------------------- AWOD Newsletter for May 1998 In this issue: (...) 56K MODEM UPGRADE We have mentioned in the past several newsletters that we have been waiting for our vendors to release equipment that is compatible with the v.90 56k standard. Many of our servers and switches have been upgraded during the past few months in preparation for this massive project. We normally purchase equipment from Bay Networks and Ascend. Bay has now informed us that their 56k modems will be v.90 compliant in June. Our Ascend representative told us last week (5/1) that their upgrade will be ready by the end of June. It is now close enough to evaluate the options and make our decision. Some of you may not be familiar with these two companies. Companies who make modems for consumers spend a lot more time and money on ads to get their name out to the public. The companies that specialize in equipment for service providers don't run television commercials. Ascend is the largest single producer of modems and related servers for ISPs. Bay is somewhere in the middle of the pack in modem production, but up near the top when it comes to routers. Our primary router that connects AWOD to the Internet backbone is a Bay product. We currently use Bay modems on the 853-0856 service number. Most of our dedicated network customers connect to us through Ascend equipment. Both Bay and Ascend assure us that their v.90 modems will be able to communicate with existing 56kflex modems that some of our customers have already purchased. They will also work correctly with any USRobotics X2 modem that has been upgraded to v.90. According to USRobotics, all X2 modems are upgradable. The result will be that your existing 56k modem should be compatible with the equipment that we install. The upgrade will be an investment of more than one quarter of a million dollars. The selection of equipment should be made within the next 2 to 3 weeks, with an anticipated installation in the beginning of June. (...)

To: djane who wrote (46066)	5/5/1998 10:26:00 PM
From: djane	Read Replies (6) \| Respond to of 61433

Newbridge, AT&T See 'Significant' Potential In Deal (from NN thread) Dow Jones Newswires -- May 5, 1998 ______________________________________________________________________ Newbridge, AT&T See 'Significant' Potential In Deal By Scott Adams TORONTO (Dow Jones)--AT&T Corp. (T) and Newbridge Networks Corp. (NN) see much potential in the AT&T Managed Bandwidth Service deal announced earlier Tuesday, but won't elaborate on how much business the new deal is expected to generate for either company. As reported earlier Tuesday, AT&T Corp.'s AT&T Solutions has introduced AT&T Managed Bandwidth Service, a new vehicle that will provide global network services to corporate customers using Newbridge's family of equipment and software. There is no limit on how long the arrangement can last. Asked how much revenue Managed Bandwidth Service may generate, AT&T Managed Network Solution services director Bill Callahan told Dow Jones he can't disclose such information. Callahan said the service is targetting the biggest 3,000 companies in the world, which typically have hundreds to tens of thousands of sites in their networks. "We would be providing this service to every one of those locations," Callahan said. "If you extrapolate the numbers, you see this is fairly significant." "This is very significant for Newbridge," added Terence Matthews, Newbridge's chairman and chief executive. AT&T Solutions is the arm of AT&T Corp. that provides network consulting services to corporate customers. Within that arm is AT&T Managed Network Solutions, or MNS, which manages networks for corporations. AT&T Managed Bandwidth Service is part of MNS. Newbridge will provide an end-to-end platform for voice, data, video and image using its products. Callahan said the service will be generally available by summer. "We've had a lot of interest from a lot of different customers," Callahan said. "We have some active engagements right now so we don't expect this to take a long time to ramp up." Matthews said he expect this latest arrangement to improve Newbridge's already "long-standing relationship" with AT&T Corp.