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Technology Stocks : TLAB info? -- Ignore unavailable to you. Want to Upgrade?

To: Dave Dickerson who wrote (3780)	9/14/1998 5:29:00 PM
From: Beltropolis Boy	Respond to of 7342

just jacked in to see a whopping 100 posts since 6:30 this morn. my apologies if this has already been posted. ----- *Top Stories: Update* Tellabs Isn't Looking to Be Acquired** By Kevin Petrie Staff Reporter 9/14/98 5:03 PM ET After TSC posted a story on his company's prospects, Tellabs (TLAB:Nasdaq) CEO Michael Birck returned a call and said Tellabs is not looking to be acquired. "I don't think that's very likely," Birck says. While heft is important among telecom suppliers, he doesn't think folding into a larger concern is necessary to survive. On the other hand, Birck will consider acquiring other companies, although no deals are on the table. In the meantime Tellabs has other priorities. One is to speed internal development of asynchronous transfer mode switches that would compete with products made by industry leader Cisco (CSCO:Nasdaq) and highflier Ascend (ASND:Nasdaq), Birck says. And he disagrees with investors who worry about the threat of optical technology. Tellabs' core products, he says, can augment optical systems, not just be supplanted by them. The following story was posted at 4:08 p.m. EDT. Back to the Drawing Board at Tellabs Desperately seeking a partner. That's Tellabs (TLAB:Nasdaq), which thought this summer it had found one but whose headaches in this deal-crazed sector may have just begun. Today the telecommunication-equipment supplier called off its merger with troubled Ciena (CIEN:Nasdaq), a builder of bandwidth-boosting products for optical fiber networks. The merger began unraveling after onetime highflier Ciena lost out on two contracts and made gloomy forecasts about earnings growth. This morning, Tellabs executives warned in a conference call that sales fell a bit short in the current quarter. Tellabs said slow bookings in August will keep third-quarter profits from exceeding second-quarter levels. However, the executives assured analysts that they were comfortable Tellabs could earn $2.35 per share in 1999, according to one money manager listening to the call. The Ciena merger would have allowed Lisle, Ill.-based Tellabs to broaden its product line in order to stake a position as the telecom industry moves from electronic phone networks to more advanced optical networks that carry lots of data. Now Tellabs faces difficult choices. "This isn't great news for Tellabs," says vice president Phillip Coburn with Lynch & Mayer, an institutional money manager. "The indications for the last two years is that that they needed to cross the chasm" and delve into new technologies, Coburn said. Now, Tellabs could either acquire a networker that provides remote access or asynchronous transfer mode network products, or it could be acquired by a bigger player. But "either of those strategies is not the one that Tellabs wanted to pursue," Coburn says. He declined to state his firm's position or history with the two stocks, but said he concluded this summer that it would be difficult for the merger to add to Tellabs' earnings next year. Another money manager said he sold Tellabs even as it was renegotiating the Ciena merger. At first the stock swap was valued at $7 billion, but after Ciena lost a possible AT&T (T:NYSE) contract, Tellabs and Ciena shares retreated and the firms renegotiated, cutting the deal's value to $4.9 billion. "As much as I like Tellabs and respect them, they just seemed too hungry to do the deal," says Craig Ellis, manager of Orbitex Info-Tech Fund. Tellabs' eagerness showed possible signs of weakness, Ellis mused. The paramount question: When will "digital cross-connects," Tellabs' core products, be supplanted by new generations of network products that carry signals in light rather than electronic digits? Tellabs' problems this quarter indicate the answer might be sooner rather than later. It might be easier to determine in the fourth quarter, which is often stronger that the third. "I'm going to be hesitant to go back into Tellabs at this point," says Ellis. One reason is that Tellabs might find it hard to find the right partner. Possible targets include Advanced Fibre Communications (AFCI:Nasdaq) which also sells to Baby Bells, but Ellis says its electronic-based products would do little to complement Tellabs' offerings. An Advanced Fibre spokeswoman could not be reached for comment. On the other hand, Tellabs could be acquired by Cisco (CSCO:Nasdaq) or Ascend (ASND:Nasdaq), which are major players. However, Ellis says these companies would benefit little from purchasing Tellabs' older telephone-based technology. Cisco declined to comment, and Ascend officials could not be reached to comment. A slightly more plausible scenario is Tellabs snapping up Fore Systems (FORE:Nasdaq), a builder of strong ATM boxes that could benefit from Tellabs' enviable client list of Baby Bells. For its part, Tellabs would get Internet-based architecture. Ellis says Fore is a digestible candidate, but he still finds a deal highly speculative. A Fore spokesman declined to comment. Ellis says Lucent (LU:NYSE), Northern Telecom (NT:NYSE) or Alcatel (ALA:NYSE ADR) are unlikely to purchase Tellabs in the near term. Those companies compete with Tellabs, so there is product overlap. Nortel declined to comment; Lucent and Alcatel could not be reached to comment. And for Tellabs the mating dance begins all over again.

To: Dave Dickerson who wrote (3780)	9/14/1998 5:44:00 PM
From: John Carson	Read Replies (1) \| Respond to of 7342

Heard on CNBC about an hour ago that an analyst covering TLAB said TLAB should still have a strong fourth quarter.

To: Dave Dickerson who wrote (3780)	9/14/1998 7:13:00 PM
From: llwk7051@aol.com	Read Replies (1) \| Respond to of 7342

Dave and all, Did you listen to conference call? I did and I can't understand the drop. If Tlab was 93 before the call I could understand, but it had pulled back 50% from its high. Brick still thinks estimates for fourth quarter and next year are good. Didn't include info in press release because he didn't think a penny was a big deal. I think the market overreacted. I would be interested in other peoples impression of the call. Robert D.

To: Dave Dickerson who wrote (3780)	9/14/1998 10:30:00 PM
From: Beltropolis Boy	Respond to of 7342

Remember that if 3rd 1/4 is $.46/share, that still is up 35% over last year's $.34/share... Titan and Martis are in 5th inning of baseball game, with about 3-5 good year's to go... This company is not dead, it just gets a resting period to rethink it's strategic moves. dave. we're obviously not the only people listening and (for the most part) heeding your words. see below. (if opinions count, i would have preferred a renegotiated deal for all the obviously previously hashed synergies -- so, while the following headline is just a wee bit brash, i do continue to set my sights on the next millenium, not next week.) keep keeping on, -chris. ----- Merger Cancellation Won't Hurt Tellabs (09/14/98; 7:13 p.m. ET) By Gabrielle Jonas, TechInvestor Tellabs shares took a dive Monday after the company canceled its planned merger with Ciena, but in the long run, the breakup will have a greater negative impact on Ciena, an analyst said. After the announcement Monday, Tellabs [TLAB] shares plummeted 7 5/16 to close at 37 11/16, or more than 16 percent, while Ciena [CIEN] stock fell 2 3/4 to 13 3/16, or more than 17 percent. More than 54 million shares of Tellabs traded hands and 18 million shares of Ciena were bought and sold. In early June, Tellabs said it would buy Ciena for $7.1 billion in a stock swap. The deal's terms were renegotiated last month, cutting the value of the original deal by more than one-third to $4.7 billion. The deal was revised after both companies' shares dived after a third quarter profit warning from Ciena. Ciena shares fell even more in August after the company failed to secure a major contract from AT&T. But Tellabs won't be hurt by the cancellation of the merger. "The benefit of the merger for Tellabs was two or three years in the future, while the near-term benefit was more to Ciena's side," said Patrick Houghton, senior vice president at Wheat First Union. Houghton will adjust his post-merger outlook of 43 cents for Tellabs' third quarter and 54 cents for the fourth quarter by a penny or two. He's also going to add 10 cents to his $2.20 earnings estimate for fiscal 1999. "Tellabs' prospects are very strong going forward," Houghton said. "The bandwidth is still growing in the network." His forecast for Tellabs' 1999 fiscal year was $2.35 before the merger was announced. "I'll probably return to something north of $2.30," Houghton said. In fact, what caused Tellabs shares to drop Monday was the company's announcement that quarterly sales of its core products were flat compared to last quarter, Houghton said. "We're still talking about 30 or 35 percent top-line growth on a year-over-year basis, and the stock is now selling for 15 times the 1999 numbers." Ciena, on the other hand, is under pressure in terms of both pricing and competition in the optical-equipment business, as networking requires more and more cross-connects to handle bandwidth. techweb.com

To: Dave Dickerson who wrote (3780)	9/15/1998 12:16:00 AM
From: Wright Sullivan	Respond to of 7342

To TLAB thread old timers- Whew, 100 messages today, we got day traders, we got long term bulls, we got it all. Y'all remember the days not so long ago when things got so dull on this board that Dave Dickerson suggested we each think of five good/useful things to post about TLAB, each day for a week! I think that was just before TLAB flew up close to 90. I'm pining for those days right now. No, not for the price as much as for the clearer future, since high & low prices will come and go. I still feel solid about the next few years of TLAB, but they are playing in a rapidly shifting field. No clear picture more than two or three years out, for sure. Dave, thanks for the many informative posts. Hopefully we'll return to relative obscurity and solid growth again soon. And now I'll return to my quiet place on this thread. Good investing, Wright