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

To: Kent Rattey who wrote (49892)	7/14/1998 9:05:00 PM
From: Kent Rattey	Respond to of 61433

(UPDATE) Telecom-Networking Company Ascend Swings To A Profit Dow Jones Online News, Tuesday, July 14, 1998 at 19:31 NEW YORK -(Dow Jones)- Ascend Communications Inc. and Advanced Fibre Communications Inc., two communications-technology companies that have been frequently mentioned in takeover rumors, both reported second-quarter results late Tuesday with Ascend's report clearly the better of the two. Alameda, Calif.-based Ascend (ASND) late Tuesday said net income came to $59.1 million, or 29 cents a share on a fully diluted basis, compared with a net loss of $48.8 million, or 26 cents a diluted share, in the year-earlier period. Revenue increased 5% to $327.4 million. The mean estimate of analysts surveyed by First Call was for net income of around 28 cents per share. Petaluma, Calif.-based Advanced Fibre (AFCI) said net income came to $7.2 million, or nine cents a share on a fully diluted basis, compared with $8 million, or 10 cents a diluted share, in the year-earlier period. Revenue increased 39% to $85.3 million. A few weeks ago, Advanced Fibre said second-quarter earnings would be below analyst expectations. The news sent its stock price plummeting 52%. Prior to the warning, analysts were looking for earnings of 17 cents a share. Advanced Fibre Tuesday cited a "setback" in sales in China and a change in managers and distributors in that nation. The company also said it lost a bid for sales at GTE Corp. and saw less-than-expected sales to the regional Baby Bell phone companies. With Alcatel-Alsthom SA planning to gobble up DSC Communications Corp. and Tellabs Inc. announcing a deal to buy Ciena Corp., analysts say small and medium-sized makers of telecommunications and computer-networking equipment will have a difficult time remaining independent. The two converging sectors has long been dominated by giants such as Lucent Technologies Inc., Canada's Northern Telecom Ltd., Swedish firm Telefon AB L.M. Ericsson and Cisco Systems Inc. Ascend is a leader in the sizzling market for remote-access servers, which allow users to dial into company networks and Internet services. Ascend has recovered from last year's dumps, when software problems caused product malfunctions and the merger with Cascade Communications Corp. sapped management resources. Advanced Fibre develops equipment that boosts the capacity of telephone networks. The company's main product is the Universal Modular Carrier 1000, which is designed to enable telephone companies, cable companies and other service providers to connect subscribers to the central office switch for voice and data communications over copper wire, fiber optic cable, coaxial cable and analog radio networks. A number of analysts Tuesday played down the latest round of rumors - that Ascend is interested in acquiring Advanced Fibre. Advanced Fibre said it wasn't in talks with anyone. Ascend declined to comment. Joe Noel, a Hambrecht & Quist analyst who visited Advanced Fibre on Friday, heard the takeover rumors, but he doesn't believe the company is about to be acquired. Still, Noel said Advanced Fibre will ultimately belong to another company's product portfolio. But he believes management would resist a bid at current stock levels. Tuesday, Advanced Fibre's shares closed up $1.313, or 5.4%, at $25.438, but are off sharply from over $40 on June 30, when the company warned that second-quarter earnings would be below estimates. Advanced Fibre has had most of its successes with smaller independent carriers that serve suburban and rural areas, but it is determined to start selling to the Baby Bells. At the same time, Advanced Fibre has rejiggered its products to handle digital subscriber line service, a technology for accessing the Internet at high speeds. DSL, the Baby Bells' answer to cable modems, is currently offered is a handful of cities and suburbs nationwide. Advanced Fibre's growth prospects rest largely on its ability to sell to larger customers. Noel believes the company had a good shot at winning new business from Bell Atlantic Corp. and SBC Communications Inc. but he doesn't expect the contracts to be awarded until September. Copyright (c) 1998 Dow Jones & Company, Inc. All Rights Reserved.

To: Kent Rattey who wrote (49892)	7/14/1998 9:16:00 PM
From: Kent Rattey	Respond to of 61433

Ascend Profits Are Higher Than Expected (07/14/98; 7:30 p.m. ET) By Sergio G. Non, TechInvestor Ascend topped analyst forecasts by a penny during the second quarter. In results released after market close Tuesday, the Alameda, Calif.-based network-equipment company posted earnings of $59.1 million, or 29 cents a share, on sales of $327.4 million. First Call consensus was 28 cents a share. "We showed good growth in our international markets and we were able to bring to market key products and services," said Mory Ejabat, president and CEO, in a statement. Shares of Ascend [ASND] fell 3 7/8 to 49 9/16 in advance of the earnings release, as investors lost faith in rumors that Ascend (company profile) would be acquired. The company said it expects growth to continue, especially in North America, as the effects of telecommunications deregulation take hold. "In particular, we see the CLECs [competitive local exchange carriers] remaining strong for the near to midterm," Ejabat said. "We also see strength in many of our international markets, though, like others, we continue to remain cautious about much of Asia-Pacific, and Japan in particular."