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Technology Stocks : Newbridge Networks -- Ignore unavailable to you. Want to Upgrade?

To: pat mudge who wrote (4869)	6/3/1998 5:04:00 PM
From: Bron-y-aur	Respond to of 18016

summary from briefing.com this morning (nothing new here but is a concise explanation of why this short term PAIN) NEWBRIDGE NETWORKS LTD. (NN) 26 1/16 -3 15/16. While most computer networking stocks are enjoying a plus day in the market, shares of this developer of a desktop-to-desktop family of networking products are not part of the rally after the company reported Q4 results that were in line with market expectations. Though such news should be viewed as a positive given recent disappointing results Newbridge had reported, apparently the company's earnings of $0.13 a share are being compared to whisper numbers that called for a profit of a couple of cents higher. Revenues for the period rose to $395 mln, a 10% increase on a sequential basis, but 10% lower than in the year-ago Q4 period. In addition, the company suggested that expenses in the new fiscal year are likely to rise above the level Wall Street had anticipated as competition in the asynchronous transfer mode market intensifies, particularly as large players like Lucent Technologies (LU 70 1/2 -1 3/16) make their presence more pronounced. This all means that Newbridge will continue to experience pricing pressures in its main market, which will put additional pressure on gross margins. Last night's report and today's stock activity has not prompted analysts to retreat from continuing to recommend the stock, however, as Cowen & Co. has reiterated its "strong buy" rating on the stock, while Wheat First Union also continues to rate the stock a "buy." It has done little good as shares of Newbridge are giving back all of yesterday's pre-earnings release gains and more as investors feel that the planned recovery in earnings visibility is still too far into the future.