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

To: MD Bryant who wrote (6895)	10/7/1998 2:57:00 PM
From: Doug	Read Replies (2) \| Respond to of 18016

M.D.B: I believe they will have to do more than a bit. Here is why. Lets assume there are no gains in productivity , no price competition and no changes of other Expenses. Based on history, Gross Margin is 60%, SG&A 30% on Sales. No of share 191m. Problem is to determine increase in sales for 10c increase in earnings. The extra revenue amounts to (191 *0.10 /(0.6-0.3))= $63.6m which represents a 15% increase in sales. This is not impossible and may even be improved if there are gains in productivity. However the Economic Climate is against NN and therefore one needs better substantiation to prove that Increased Sales is a reality.