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

To: Bindusagar Reddy who wrote (50157)	7/17/1998 3:26:00 AM
From: djane	Respond to of 61433

Jubak/Microsoft Investor on earnings season. Section on ASND [See link for full article] investor.msn.com On July 14, the day that it reported, shares of Ascend Communications (ASND) got a smack from the other hand -- the stock fell almost $4 as investors dumped shares out of fear that the company would miss estimates of 28 cents a share. The nervousness was certainly understandable -- Ascend had completely lost control of its business in the middle of 1997, producing a negative 11% earnings surprise last July. With the stock (a Jubak's Pick on Sept. 2, 1997 at $40.88) up about 100% so far this year, who wouldn't want to lock in some profit? 4. In the long term, relief rallies and nervous swoons don't matter. Look to see how stocks respond in the days after the actual earnings report. Compaq's relief rally ended the day it released earnings -- the stock pulled back a fraction of a point. Not surprising; although the 2 cents a share reported was better than expected, the company's guidance for the next quarter didn't give investors anything to cheer about. Compaq basically told analysts to write off the third quarter -- the buzzword was "transitional." That puts tremendous pressure on fourth-quarter earnings. To make analyst estimates for the year, Compaq has to report 47 cents a share in that period. In the company's 1997 record year for earnings, it only made 42 cents in the same quarter. Ascend, on the other hand, climbed by $1.31 a share after the company beat estimates by 1 cent a share. Nothing in the report suggested that anything had occurred to derail the company's recovery from the problems of 1997. All guidance from the company indicated that earnings for the year would come in as expected by analysts, or a few pennies higher.