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Technology Stocks : Newbridge Networks -- Ignore unavailable to you. Want to Upgrade?

To: pat mudge who wrote (6347)	9/3/1998 6:38:00 AM
From: Glenn McDougall	Read Replies (1) \| Respond to of 18016

CrossKeys stays on record tear By STUART McCARTHY, Business Editor, Ottawa Sun Despite confusion, a weakening of sales through Digital Equipment Corp. and a softening Asian market, CrossKeys Systems Corp. still topped analyst estimates in its latest results. The Kanata-based developer of telecommunications network management tools had its 10th straight record quarter with first quarter revenues of $12.1 million, up 43% from $8.4 million a year earlier. Profits for the quarter this year of $1.9 million were more than double the $835,000 in the first quarter of fiscal 1998. At 10cents a share (7cents US), the earnings were right at the top end of the 6cents to 7cents US spread called for by analysts. "The first quarter marks a milestone for CrossKeys," said CEO John Selwyn. Selwyn said the Newbridge Networks affiliate continues to reap the benefits of telecom deregulation around the world. "These new networks require multivendor solutions," said Selwyn. "That's an environment tailor made for CrossKeys." The company's flagship product called Resolve, allows network operators to monitor and fine tune performance and integration of varied and large systems at the carrier level. About 61% of sales came through Newbridge Networks' sales channels, 31% through Siemens and 6% through Digital Equipment, which was recently acquired by Compaq. Company officials said new agreements are being hammered out to boost the Digital/ Compaq channel as well as adding new partners. "We've added support for Nortel's Passport switch," said Selwyn. While that support was specifically for one customer, he said discussions are underway with Nortel to see them hopefully become a sales conduit as well. However, CrossKeys shares have plunged to below $9 on the Toronto Stock Exchange after debuting at $13.50 and rising to $22.50. CrossKeys chief financial officer Steve Spooner because of market turmoil, investors have dumped small cap shares in favor of bigger players. He also said a lot of shares are still tied up in the hands of company employees and executives for three more months. CIBC Wood Gundy analyst Todd Coupland said he's maintaining his 12-month target of $21 a share. "Despite the problems with Digital and Asia, they still came in at the top of estimates," said Coupland. "In the three quarters since they went public they've delivered on everything they've promised." Coupland said he's not phased by the heavy tie-in with Newbridge in terms of sales. "CrossKeys wouldn't be where it is today without Newbridge," he said. "In terms of taking them to the next step, I and other investors would like to see them with some other channel partners and I think they will do that this year." CrossKeys shares closed up yesterday 80cents to $8.75 on the TSE.