A couple news releases that mention NN:
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Canadian Stocks Gain, Led by Northern Telecom as Profits Jump
Toronto, July 21 (Bloomberg) -- Canadian stocks rose for a sixth day, led by Northern Telecom Ltd. after its second-quarter profit beat analysts' expectations by a penny, raising expectations for future profits.
The Toronto Stock Exchange 300 Composite Index rose 42.74, or 0.6 percent, to 7475.40 as Northern Telecom jumped C$5.35 (US$3.58) to C$94.10, contributing 19 points to the advance.
North America's No. 2 phone-equipment maker said profits before gains and charges rose to 41 U.S. cents a share, up from 30 U.S. cents a year ago. The company, which split its stock 2- for-1 on Jan. 7, was expected to earn 40 cents a share by analysts surveyed by First Call Corp.
''Northern Telecom reported solid earnings and that gives guidance that earnings going forward will also be good,'' said Andrew Martyn, a portfolio manager at Davis-Rea Ltd. Investment Counsel, which manages assets of C$200 million.
Northern Telecom and its main rival, Lucent Technologies Inc., North America's largest phone-equipment maker, are gaining as phone companies struggle to keep up with mushrooming data traffic.
BCE Inc., which owns a 51.7-percent stake in Northern Telecom, rose C$1.90 to C$67.00. Northern Telecom and BCE account for a combined 10.5 percent of the TSE 300.
Newbridge Networks Corp., which makes voice and data equipment, gained C$1.15 to C$34.10 on anticipation it'll also report earnings growth.
Nova Buys Hunstman
''Anytime a company beats earnings estimates it's positive,'' said Rick Hutcheon, chief investment officer at the CentrePost Group of Mutual Funds, which manages C$250 million in assets, including Northern Telecom stock. ''When it's a stock that's been badly beaten up its particularly positive.''
Northern Telecom fell 18 percent following a June 15 announcement it would buy Bay Networks Inc. for US$7.27 billion.
BCE was the most active issue in Toronto, with almost 1.6 million shares changing hands.
NOVA Corp. rose C$1.05 to C$26.40 after it said it will buy U.S.-based Huntsman Corp.'s U.S. and European styrene-making units for US$920 million. Hunstman will buy US$235 million of exchangeable preferred shares of NOVA that can be converted into 10 million common shares after July 1, 2000, which will make Huntsman the single-largest NOVA shareholder.
Suncor Energy inc. gained C$1.25 to C$52.70 and Petro- Canada jumped C$0.20 to C$24.60 as investors bet the results of the weekly report of the American Petroleum Institute, to be released after trading today, will show that crude supplies fell last week in the U.S. the world's biggest oil consumer. Almost all Canadian oil exports are to the U.S market.
Crude for August delivery rose 42 U.S. cents to US$13.76 a barrel on the New York Mercantile Exchange's Comex division.
Greenspan Speaks
Investors said the Federal Reserve is unlikely to raise rates anytime soon, raising expectations that Canadian rates will remain unchanged. Low rates are good for stocks since companies and consumers are able to borrow money cheaply, boosting spending and corporate expansion.
Fed chairman Alan Greenspan said the U.S. economy is probably headed for a soft landing from its recent rapid growth rate.
Still, Greenspan repeated his warning that stock prices will be difficult to sustain unless profits continue accelerating and inflation stays low.
The TSE reported decliners outpaced advancers 392 to 360, with 267 issues unchanged.
Dollar Hits Low
To be sure, gains were muted as the Canadian dollar slipped below 67 U.S. cents for the first time and touching an all-time low of 66.98 U.S. cents. It recently traded at 67.02 U.S. cents down from yesterday's close of 67.18.
A declining dollar increases the risk for non-Canadian investors that may lose any capital gains through currency depreciation as they repatriate profits.
''Welcome to the Northern Peso,'' said Martyn.
Biovail Corp. rose C$4.05, or 8.5 percent to C$51.55, its biggest one-day jump since Apr. 29 last year, after it received U.S. marketing approval for its generic version of Trental from the Food and Drug Administration. Trental is sold in the United States by Hoechst Marion Roussel and is prescribed for the treatment of vascular disease.
MacMillan Bloedel Ltd., one of Canada's largest forestry companies, rose C$0.65 to C$16.35 after it said its second- quarter earnings more than doubled because of higher prices for some packaging products and building materials.
The company's profit from continuing operations before a charge rose to C$14 million from a profit from continuing operations of C$6 million, or C$0.04 a share, a year ago. In the latest quarter, a charge of C$23 million related to the repayment of some debt resulted in a loss from continuing operations of C$9 million, or C$0.08 a share.
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Dow Jones Newswires -- July 21, 1998
Telecom Eireann Orders Siemens/Newrbidge MainStreetXpress
Dow Jones Newswires
BOCA RATON, Fla. -- Newbridge Networks Corp. (NN) said Telecom Eireann (Ireland) has ordered a broadband multiservice ATM solution based on the Siemens AG/Newbridge MainstreetXpress platform.
The value of the order wasn't provided.
In a news release, the company said the solution will be used to consolidate and facilitate high bandwidth network services.
As part of the initial rollout, Newbridge said Siemens will install six MainstreetXpress 36170 multiservices switches in Dublin. The network is expected to reach a total of 25 nodes by the end of the year.
The company said the new network will allow Telecom Eireann to provide data and voice solutions on a single platform for customers such as large international companies.
Newbridge Networks, Kanata, Ont., makes and services networking products.
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Dow Jones Newswires -- July 21, 1998
Newbridge Up On Takeover Talk; Analyst Says Deal Unlikely
By BEN DUMMETT
Dow Jones Newswires
TORONTO -- Newbridge Networks Corp.'s (NN) stock is up on "takeover rumors," analysts said, but at least one analyst believes a deal is unlikely in the near term.
James Kedersha, an analyst at Cowen & Co. in Boston, downplayed the takeover rumors, figuring that Alan Lutz, Newbridge's recently appointed president and chief operating officer, wants to fix the networking company's problems himself.
No one was immediately available at Newbridge for comment.
Newbridge, a manufacturer of high-speed asynchronous transfer mode, or ATM, technology, hired Lutz in June after reporting a string of disappointing quarterly earnings results.
Since Lutz's appointment, Newbridge's head of U.S. sales has left the company, with some analysts noting that Newbridge has trailed its competitors in selling equipment in the U.S. to alternative carriers and Internet service providers.
Newbridge, which is based in Kanata, Ont., also announced earlier this month that three inside directors had resigned from the board "to provide better balance with outside director representations." It didn't replace the departing directors.
Though Kedersha at Cowen doesn't consider Newbridge a takeover candidate in the near term, he isn't surprised that rumors to this effect are circulating.
He said some investors, attracted to the stock's low price level in the US$20-a-share range, have recently bought the stock and are now "talking (the stock) up."
Kedersha said the rumored takeover offer for Newbridge is around US$30 a share. He couldn't name the companies rumored to be interested in acquiring Newbridge.
On the New York Stock Exchange, the issue is up 7/8 at 22 3/4, down from a 52-week high of 69 3/8.
On the Toronto Stock Exchange, Newbridge is up 0.90 at 33.85, versus a 52-week high of 95.
James Kedersha of Cowen & Co. said recent speculation over Newbridge Networks Corp.'s (NN) distribution alliance with Germany's Siemens AG (G.SIE), a big telecommunications equipment manufacturer, could be contributing to the takeover rumors.
Over the last month, rumors have circulated that the alliance is weakening, which if true, could make Newbridge a more likely takeover candidate. Siemens has always been considered a "white knight" for Newbridge in the face of a takeover attempt, thus discouraging possible suitors, Kedersha explained. It makes sense then Newbridge would become a more attractive takeover target if its partnership with Siemens ended.
Over the near term, Kedersha expects the Newbridge-Siemens alliance to continue. But in the long run, Newbridge might not need the partnership as it builds up its presence in Europe, Kedersha said.
A fund manager, who didn't want to be identified, also said there are rumors that the Newbridge-Siemens alliance soon will be "redefined" under less favorable terms for Newbridge.
Paul Sagawa, analyst at Sanford C. Bernstein, said he hadn't heard about the takeover rumors regarding Newbridge. However, he also downplayed the possibility of takeover offer emerging any time soon.
For instance, an unsolicited bid is unlikely because Terry Matthews, Newbridge's founder, chairman and chief executive, has publicly stated he would fight a hostile bid by hiring away Newbridge's top engineering talent to set up a competing operation, Sagawa noted.
In addition, Matthews' 21% stake in the company would "scare anybody" mulling a takeover bid, he predicted.
Sagawa noted that the telecommunications equipment industry is rife with takeover rumors. Last week, Ascend Communications Inc. (ASND) was rumored to be planning a bid for Advanced Fibre Communications (AFCI).
Ascend declined to comment on the rumors, but reports following the talk downplayed a possbile tie-up.
Noting that all the momentum investors are out of Newbridge's stock, Sagawa said value investors and bargain hunters are probably behind the current interest in the stock because of its relatively low price.
-By Ben Dummett; 416-943-7807
with files from Scott Adams
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Dow Jones Newswires -- July 21, 1998
Newbridge Says Takeover Rumors 'Completely False'
Dow Jones Newswires
TORONTO -- Alan Lutz, president and chief operating officer of Newbridge Networks Corp. (NN), told Dow Jones that takeover rumors surrounding the company are "completely false."
Newbridge, a Canadian telecommunications equipment company, saw its stock jump Tuesday, on rumors that it was the target of a planned takeover offer.
However, Lutz, in a brief telephone interview, adamantly dismissed the talk, and referred to it as "off the wall." He declined to comment further.
Tuesday on the Toronto Stock Exchange, Newbridge' stock closed up 1.10 at 34.05. On the New York Stock Exchange, the issue rose 1/4 to 22 1/8.
-By Ben Dummett; 416-943-7807
In a telephone interview, John Lawlor, head of investor relations at Newbridge Networks Corp. (NN), said that contrary to market talk, the company's alliance with Siemens AG (G.SIE) is strong.
"Any notion that the relationship is heading south would be totally erroneous," Lawlor stressed. Referring to the Siemens alliance, Lawlor said: "It's been a winning relationship for two and a half years and we'd be stupid not to continue to build" on the alliance.
Lawlor said Alan Lutz, Newbridge's president and chief operating officer, has met with Siemens executives twice in recent weeks, in a bid to "revitalize" and strengthen the alliance.
Newbridge's relationship with Siemens is important to Newbridge, because Siemens distributes and sells Newbridge's equipment in Europe and Latin America.
Lawlor also confirmed that Lutz has cut C$34 million from the company's budget for the current fiscal year ending April 30, 1999, mainly in selling, general and administrative expenses.
Newbridge chief financial officer Ken Wigglesworth said most of the benefits from the planned reduction in costs will show up in the company's bottom line in its fiscal second, third and fourth quarters.
After the company's first-quarter results are released next month, the financial community will get a better idea of the impact of the planned cost-cutting measures, Lawlor said.
-By Ben Dummett; 416-943-7807
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I'm wondering if the comments in the FT article regardinig Siemens' change in accounting to US practices is responsible for all the speculation.
Curious how the analysts being interviewed deny the rumors while fueling them at the same time.
Later ---
Pat |
