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Technology Stocks : Orckit (ORCT) -- Ignore unavailable to you. Want to Upgrade?

To: Daniel Ralls who wrote (1533)	10/19/1998 10:43:00 AM
From: D.J.Smyth	Read Replies (2) \| Respond to of 1998

dsl standards to be set by Friday: news.com

To: Daniel Ralls who wrote (1533)	10/22/1998 1:59:00 PM
From: SoMo	Read Replies (1) \| Respond to of 1998

[cost reduction & margins] Hi Daniel, savo and all. I'm glad to get back to that thread. Would like to bring some other insights to your Q3 #'s. 1. of the $7.4MM ADSL sales, some came from Telia and from other small accounts like in South America (as Tamir noticed in the cc) where price/line should be higher than for GTE. But this should be of little influence on your #'s. 2. for Q4 #'s my view is that because the co' was more aggressive on DT than on GTE, the DT forward-pricing effect on gross margins should be even more negative than for GTE. 3. I'm inclined to thing some cost savings will be achieved from this quarter (plastic casing) but this won't be enough to counterbalance the negative DT sales impact. As expected right now we should see the bottom at Q4, as the new chipset will hopefully make the difference in Q1. I was once again quite satisfied by Tamir's confidence in the co's milestones plans. I was really impressed by the GTE's orders growth. My view is DT should be less aggressive (good thing for the co' till it gets positive GM). I'm still waiting to come back...but this market is really crazy. Good Luck to all SoMo.

To: Daniel Ralls who wrote (1533)	10/25/1998 3:27:00 PM
From: savolainen	Read Replies (2) \| Respond to of 1998

[q4 ?] hi daniel, thanks for pointing out the relationship between 30-40% chipset savings and cost per line... hadn't noticed it... in the cc. tamir was not going to name numbers about these specific cost savings for the new chip even when asked directly (believe i posted that part of the cc) but explained that he had given enuf guidance...so wouldn't be at all surprised if we are retracing the (somewhat crude) steps used by the analyst(s) to generate this number (160)... do any of the reports give revenue figures for q4 or q1 99? if so, this might be a way of backing into the adsl loss/ line for next qtr... on the cc. tamir mentioned a cost savings milestone for q4, but he didn't go further (and wasn't asked).. so whatever this one is, it will need to be factored in... and indeed, i did get something backwards in my math... but fwiw now q4 seems more straightforward --- a rough initial pass at q4: just noticed that something was out of whack with my math last time thru... as a double check adsl revenues of $7.4 million should have equaled 15,580 lines @ contract average/line @ 330, but that only equals $5.1 million... most likely orctf probably did indeed ship more lines, but the losses were less per line than assumed: going with $330 contract average/line... 7,400,000/330= 22400 lines... in line with the info you posted from the analyst reports...so that checks... if orctf only lost $2.3 million on adsl then they only lost about $103/ line (2,300,000/22400= 103) or orctf cost/line in q3 was $433... (330 +103= 433) not $475 as i speculated last time.. a key explanation to getting these speculations to work out is to take the cpe box savings of $100 out entirely... quite possible this had already happened prior to q3 or early in the qtr.. and am gonna rationalize in that this was mentioned much earlier in the year as being scheduled for completion by q3.. so if we just take extra $100 out of the picture altogether, the pieces do seem to kinda fit... but yowsa... if indeed orctf did ship 22,400 lines in q3 that is a whole lot!!! ... but now much closer to those estimated for q4 and hardly any contortions are therefore needed to get to estimated earnings : >> ADSL links for Q4 - GTE 20000, DT 2000, Telia 2-3000. << say q4 is indeed maybe around 24,000 lines thats only a 7% increase over q3 @ 22,400... ignoring the probable lower contract revenue per line for dt (which maybe will be offset by cost savings in q4 unnamed?)... adsl revenues for q4 would be about $7.9 million (24,000 x 330= 7,920,000) ... using the same loss/line <$103>, adsl losses would be $2.47 million (24,000 x 103= 2,472,000) or only $170,000 more than q3.. in thousands: (2470-2300= 170) if other balance sheet items hold steady, another $170,000 loss would translate into a loss for q4 of .28.. in line with estimates @ <.28> (q3 was <.27>) ... <4,593> q3 net loss + <170> additional loss = <4,763> net loss for q4 ... <4,763>/ 16,801 shares = <.28> fwiw... any thoughts? s