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Technology Stocks : Vitesse Semiconductor -- Ignore unavailable to you. Want to Upgrade?

To: lazarre who wrote (1581)	9/15/1998 4:38:00 PM
From: Drake	Respond to of 4710

Thanks for calling them. Nice to know. Being they are doing high-end, they should be okay through all of this.

To: lazarre who wrote (1581)	9/15/1998 4:39:00 PM
From: Thai Chung	Read Replies (1) \| Respond to of 4710

To All VTSS Shareholders; Dow Jones Newswires -- September 15, 1998 Vitesse Dn 7.4%; Analysts Cite Pft Warn From Client Tellabs By Scott Eden NEW YORK (Dow Jones)--Vitesse Semiconductor Inc. (VTSS) shares fell 9.5% Tuesday, a slide analysts attributed to recent profit warnings issued by two of its customers, Tellabs Inc. (TLAB) and Ciena Corp. (CIEN), which finally canceled their protracted courting ritual Monday. Tellabs cautioned investors that third-quarter earnings would be no better than those of the second quarter, while Ciena said its fourth-quarter revenue will be "materially below" that of the third quarter. The announcement spooked investors, analysts said, particularly because the recent market selloff hadn't hurt Vitesse, a Camirillo, Calif., vendor of silicon chips to telecommunications device makers, as much as its industry brethren. Indeed, Vitesse shares retain one of the highest multiples in the industry, said Joseph Osha, an analyst with Merrill Lynch Global Securities. Nevertheless, Osha characterized Tuesday's drop as an overreaction, noting that Tellabs and Ciena account for only 5% to 6% of Vitesse's top line. But Vitesse's stock may also be feeling the effects of investor nervousness about a cyclical slowdown in the telecommunications device industry as a whole, analysts added. Integrated circuit maker Burr-Brown Corp. (BBRC), for instance, warned Monday that third-quarter earnings may fall 3 to 5 cents short of its second-quarter net. "People are looking around to see if anything is wrong," with that business, Osha said. Adams Harkness analyst Timothy Kellis said investors may have detected weakness at other Vitesse customers, such as Lucent Technologies Inc. (LU) and Northern Telecom Ltd. (NT), anxious sentiment that may have trickled down to projections about Vitesse's performance. But Kellis dismissed the idea that soft sales from the big telecommunication device makers would hurt Vitesse, since it currently has tight capacity constraints, or "a lot more orders" than it can ship, he said. The company's "quarter is pretty much planned out before it starts," Kellis said, meaning that the company has already recorded revenue from orders it has yet to fill. According to the analyst, even seasonally weak sales from its customers wouldn't hurt the company because of its high book-to-bill ratio. "Companies like Vitesse won't have seasonality issues like companies without capacity constraints," he added. Vitesse shares recently stood at 26 1/4, down 9.1%, or 2 5/8. Nasdaq volume reached 3.6 million shares, nearly three times the daily average of 1,266,086. Company officials didn't immediately return calls seeking comment.