Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Kent Rattey who wrote (1488)	6/26/1998 11:12:00 PM
From: Immi	Read Replies (1) \| Respond to of 1629

Network Rivals Talk Mergers, But Not 3Com Date: 6/29/98 Author: Michele Hostetler Networking gear maker 3Com Corp. is trying to round the corner after a bumpy year. Sales growth has slowed for most of the industry, excepting leader Cisco Systems Inc., while acquisitions have risen. In the biggest merger move, Canada's Northern Telecom Inc. plans to buy Bay Networks Inc. for about $7 billion in stock. But Santa Clara, Calif.-based 3Com says it's not eyeing any merger and is unique enough to remain a strong independent. Networking's No. 2 player reported a fourth-quarter profit of $63.6 million, or 17 cents a share, on sales of $1.375 billion, up from a profit of $41.8 million, 12 cents, on sales of $1.372 billion in the year-ago quarter. Excluding one-time charges this year and last, net income for the year was $246.1 million, or 67 cents, compared with $543.2 million, or $1.54. Sales fell to $5.42 billion from $5.61 billion. 3Com CEO Eric Benhamou spoke with IBD after the company released its fourth-quarter numbers last week. IBD: When will the tumult be over in the networking industry? Benhamou: I think it will take several quarters before the dust settles. What's behind all the activity, of course, is the realization that video and voice on data (networks) is inevitable and will happen fast. This is causing fundamental changes in the telecom equipment sector. All these companies that built a strong legacy business on voice technologies for carriers really have to change fundamentally what they do, at least from a technology perspective. Different companies will take different strategies. I think most will come to the conclusion that they can't get from here to there from internal developments. They'll basically choose between three strategies, one being substantial acquisition. This is clearly what Nortel has done with Bay. Smaller, focused-point acquisitions - this is so far what Lucent has done. Or partneships with a strong lineup at multiple levels - this is what Siemens has done with us. IBD: How does 3Com's strategy differ from its competitors? Benhamou: Cisco has chosen to be an integral part of the public core network. They want to supply the big switches that go into the public core network. This has made any partnership between Cisco and the large telecom vendors not only improbable but impossible. Cisco is now on a collision course with these large telecom vendors. They are massing a lot of resources to engage in an all-out war. You've seen the (patent infringement) lawsuit that Lucent has instigated (this month) against Cisco. I think that is just a prelude. I think it's going to get much more bloody in the next few quarters. Bay and Ascend . . . are much closer to pure-play companies: Bay being focused on the enterprise market and Ascend on the carrier/ISP markets. I don't think that they have the critical mass to be alone. In fact, they have deliberately chosen to be acquired. In the case of Bay, it's almost a done deal. In the case of Ascend, I think it's only a question of time. IBD: How do these changes affect 3Com? Could the company be put up for sale? Benhamou: 3Com is in a far different position. Our business scope is about creating connections that start at the very edge of the network, literally at the desktop connection or the server connection or the palm computer connection. It extends all the way up to and including the first points of switching inside the public networks uch as the Internet) at the very edge. Beyond that, there's a threshold that we don't cross. We don't go near the backbone of the public network. We don't infringe on the traditional business of the telecom equipment vendors. As a result, we're very complementary and much more suitable to partner. This is a big difference from Cisco. In addition to this, our business scope is much broader than a Bay or an Ascend. We address the needs of the consumer market and have a strong retail presence. We sell modems and we sell (hand-held) PalmPilots. We sell home-office (networking) kits into the consumer markets. We're the leader in the small-to-medium-size business. We're the leader in the ISP business. We're the second-largest supplier into the enterprise market. Across those markets, we clearly have critical mass and a diversification that no one else has. That's why we're not a good target acquisition for anyone. Not only are we bigger and more expensive, but it just doesn't fit a nice niche. In fact, we're not seeking to be acquired. We're not putting the company in play. IBD: How are 3Com's partnerships going? Benhamou: On the core side, it's clearly Siemens. Siemens and Newbridge are closely aligned. We have a shared vision of what's happening in the industry with converged network trends. We have a common architectural framework called CSI, or carrier scale internetworking, which is jointly offered by Siemens, 3Com and Newbridge. (We have) many joint development activities on common strategic platforms. One example is the voice-over- (Internet) capability of our total control platform, integrated inside the Siemens carrier class switch. Another example would be our (local- area-network) PBX offering introduced in May. It's basically a LAN telephony solution for the enterprise. IBD: What are 3Com's top challenges this quarter? Benhamou: The first (fiscal) quarter has always been our slowest quarter. It happens every year, so this year is no different. It's because the first-quarter boundary that we picked 18 years ago puts all three summer months in Q1. The seasonal slowdown is most pronounced in Europe . . . and we are relatively stronger than our competitors in Europe. Therefore, there's more pronounced seasonality than our competitors. Having said that, we do have opportunities to continue to improve . . . in terms of gross margins, expenses, balance-sheet improvements. We'll show bottom-line improvements in the first quarter but we'll probably have much slower growth at the top line. It felt good to beat analysts' expectations (in the fourth quarter). It always feels good to catch analysts going left when you're going right. We felt that as we closed the year, we really turned the corner. We're bullish about the prospect for the year. (C) Copyright 1998 Investors Business Daily, Inc. Metadata: COMS CSCO NT BAY LU ASND NN I/3574 I/4890 E/IBD E/SN1 E/

To: Kent Rattey who wrote (1488)	7/2/1998 9:34:00 AM
From: Kent Rattey	Read Replies (2) \| Respond to of 1629

Former FCC Chair Reed Hundt Joins Ascend's Board of Directors; Dr. Hassan Ahmed Assumes Responsibility for Core Systems Division BusinessWire, Thursday, July 02, 1998 at 08:20 ALAMEDA, Calif.--(BUSINESS WIRE)--July 2, 1998--Ascend Communications, Inc. (NASDAQ:ASND) announced today that former Federal Communications Commission (FCC) Chairman Reed E. Hundt has joined the company's board of directors. Hundt is well-known for having presided over the implementation of the historic Telecommunications Act of 1996, which dramatically changed the U.S. telecommunications landscape. He also helped negotiate the World Trade Organization Telecommunications agreement opening markets in 69 countries to competition and dropping barriers to foreign investment. "We are excited that Reed Hundt has agreed to join Ascend's board of directors," said Mory Ejabat, president and chief executive officer of Ascend. "Reed is a true visionary in this industry having led the effort to free up telecom competition that is today yielding benefits for individuals and businesses across the U.S., and abroad. He understands Ascend's vision, and we expect he will make a significant contribution to the company." Ascend also announced that Daniel E. Smith, executive vice president and general manager of the Core Systems Division, has resigned from the company and the board of directors, effective July 6, 1998. Dr. Hassan Ahmed will replace Smith as executive vice president and general manager of the Core Systems Division. Ahmed has been with the company since July 1995, having served most recently as Ascend's vice president and general manager of Core Switching, and prior to that, as vice president of engineering and chief technology officer for Cascade Communications Corp. Before joining Cascade, Ahmed served as a technical consultant for a number of leading technology companies. During this time, he also was an associate professor in the Electrical Engineering, Computer Science and Systems Engineering Department at Boston University. "As president of Cascade Communications and more recently as executive vice president of Ascend, Dan Smith has made major contributions to this company and the telecommunications industry as a whole for which we thank him," said Ejabat. "And while Dan's loss will be felt, we expect Hassan will continue the great work that he has done thus far and aptly take on this new challenge."