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

To: Tech Bull who wrote (1525)	8/3/1998 11:45:00 AM
From: Duke	Read Replies (1) \| Respond to of 1629

Ascend shares slightly lower after Stratus news NEW YORK, Aug 3 (Reuters) - Ascend Communications Inc. <ASND.O> shares were slightly lower in morning trading on Monday after the company said it planned to acquire Stratus Computer Inc. <SRA.N> in a deal worth $822 million in stock. Ascend stock hit a high of $45.875, up more than a $1, near the opening on Monday, but settled back to $44.25, down 22 cents, as the stock failed to recover from a $7 selloff Friday in anticipation of the deal. Still, initial reaction to the terms of the deal by some Wall Street analysts was favorable. Brokerage B.T. Alex. Brown said it upgraded its rating on Ascend to buy from market perform, while J.P. Morgan reiterated its buy rating and Merrill's analyst made positive comments. "My reaction is favorable," Merrill Lynch analyst Joe Bellace said of the terms of Ascend's deal to acquire Stratus. "There are a lot of positives," he said. J.P. Morgan analyst William Rabin said he regretted that Ascend was doing the deal at this time, fearing that it could distract the company from its existing business plans. Nonetheless, Rabin reiterated his buy rating on Ascend, citing a variety of benefits for the company. "I am sorry they did it," he said. "Ascend is recovering so well, both in business fundamentals and in its stock price," Rabin said. "I was hoping the management team would stay focused on executing its existing plans," he said. "The deal doesn't change any of the fundamentals," Rabin said, noting that Ascend remains the top supplier of high-speed data switching equipment to phone network operators, both in the strength of its technology and its market momentum. Further details of the B.T. Alex. Brown upgrade were not immediately available. Ahead of the announcement, which had been widely rumored on Wall Street last week, Bellace was wary of the deal, but he said the planned divestiture of Stratus' non-telecom related operations and the deal's positive impact on 1999 year earnings had dispelled his concerns. In its statement, Ascend had said it expected earnings for the combined company of over $1.70 per share, which analysts said means that Stratus would add 10 cents or more to Ascend's projected earnings during the 1999 year. Ascend stock tumbled $7.03 to $44.47 on Friday on concerns that the deal would distract Ascend's existing business plans and could servce as a barrier to a potential acquisition by Lucent Technologies Inc. <LU.N>, which has figured in the stock's strong performance through much of 1998, analysts said. Rabin said the Ascend-Stratus deal doesn't preclude a possible takeover of Ascend by Lucent and Friday's selloff of Ascend stock had been overdone. He noted that the $2 billion in Ascend's market capitalization that vanished on Friday was over concerns on a deal only slightly in excess of $800 million. 11:21 08-03-98 Copyright 1998 Reuters Limited. All rights reserved. Republication or redistribution of Reuters content, including by framing or similiar means, is expressly prohibited without the prior written consent of Reuters. Reuters shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon. All active hyperlinks have been inserted by AOL.

To: Tech Bull who wrote (1525)	8/17/1998 11:36:00 AM
From: Tech Bull	Read Replies (1) \| Respond to of 1629

Lucent: Getting Its Bell Rung fnews.yahoo.com Aug 17, 1998 THE ONLINE INVESTOR: Lucent: Getting Its Bell Rung Few would argue that Lucent Technologies (NYSE:LU - news) is a good company, even a great one, not to mention a great-performing stock since its spinoff from AT&T (NYSE:T - news) two years ago. But concerns about the stock's valuation have gained a louder voice in recent months, and Lucent was especially hard hit by the latest market jitters. The question du jour: Is this stock ripe for a nasty fall, or is the recent dip a chance to buy a top-tier company at a discounted price? Lucent is certainly a top-tier company. It dominates the markets for telecom switching systems, and its wireless phone gear is a hugely successful operation. It is also the second-largest maker of DSP (digital signal processor) chips, behind Texas Instruments (NYSE:TXN - news) . A few months ago, it formed a strategic partnership with another major player in this field, Motorola (NYSE:MOT - news) , to develop next-generation DSPs. But perhaps the grandest opportunity that Lucent is pursuing comes from the melding of voice and data networks. Lucent and Nortel (NYSE:NT - news) dominate the voice side of networking, while Cisco Systems (Nasdaq:CSCO - news) , 3Com (Nasdaq:COMS - news) , Bay Networks (NYSE:BAY - news) and Ascend Communications (Nasdaq:ASND - news) are among the big players in the data networking business. The integration of voice and data networking is just trickling onto the scene now, but many experts believe it will turn into a torrent in the next few years. Lucent is making a big push this year to establish its position, but Nortel is moving in the same direction and most analysts say Nortel is ahead of Lucent in this regard. Certainly Nortel's recent acquisition of Bay Networks gives it some important advantages. At the same time, Cisco and friends are pressing in from the other side. It will be a mad scramble as these networking giants try to penetrate each other's markets and at the same time protect their own turf from the aggressive invasion. Some industry watchers expect a rather bloody battle. Lucent has acquired several companies in recent months to bolster its product lineup and technology arsenal in the data networking field. There have even been occasionally rumors of a mega-merger such as Lucent and Ascend or 3Com. So far Lucent has stuck to smaller acquisitions, though. Lucent's stock price soared from an April '96 IPO price of $13.50 (split-adjusted) to a peak of $108.50 in July. Since then the stock has retreated about 23 points, and while the market in general also corrected rather sharply, Lucent was hit much harder than other top-tier, large-cap tech stocks. Indeed, the stock is dangerously close to breaking below its 50-week moving average, which could raise concern among investors who use technical analysis. For the fundamental crowd, the stock is trading at 51 times this year's earnings estimates (FY98 ending in September) and 43 times FY99 estimates. That's quite a lofty P/E for a company that is expected to grow earnings at a 22% rate over the next five years. Top-tier companies with a history of beating consensus earnings estimates naturally command premium valuations, but some say a P/E using next year's earnings estimates that is twice the growth rate is stretching it a bit. And that's with 23 points shaved off the stock. Looking at Price to Sales ratios (PSRs), Lucent is trading at a multiple of 3.9 times trailing 12-month sales, compared to Cisco Systems which is around 12 times sales. But Cisco is growing at a faster rate of around 30%, and its profit margins are much fatter. Other big data/voice networking stocks like Northern Telecom and 3Com are trading at PSRs of less than two. The near-term outlook for the stock may depend largely on whether momentum investors bail out or add to their positions. But longer-term, everyone will be watching the much-anticipated slugfest with Nortel, Cisco and the others over the voice and data networking market.