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To: Bron-y-aur who wrote (7048)	10/19/1998 11:52:00 PM
From: pat mudge	Read Replies (3) \| Respond to of 18016

Good article and in keeping with Greenspan's comments in his Berkeley address a month or so ago. Another article of interest taken from the Ascend thread: <<<< Top Stories: Ascend Ekes Through By Kevin Petrie Staff Reporter 10/19/98 8:18 PM ET In sports they call this winning ugly. Data networker Ascend (ASND:Nasdaq) beat analyst expectations but not in a very convincing manner. Most curiously, Ascend wrote off an $8.7 million loan to an unnamed customer rumored to be a new "competitive local exchange carrier" or CLEC, a breed of new carriers that have high capital expenditure budgets but face tough times with financing these days. Ascend's surprise move could signal new risks for suppliers and for CLECs. There's nothing wrong with writing off a loan that might even be paid back in time -- in fact, it's a pretty conservative accounting move. But it raises the question about whether Ascend was, in effect, buying a piece of business. "This new wrinkle in the financing will create some questions," says analyst Nikos Theodosopoulos with Warburg Dillon Read, not an Ascend underwriter. He declined to comment further. Ascend CFO Michael Ashby said in a conference call with analysts that this would not be an ongoing problem and added that the company had accounted for such a risk when predicting strong future earnings. Surprisingly, sales of large switches to phone carriers -- the growth driver earlier this year -- actually slipped a bit from last quarter because Ascend kept a big client in Japan waiting for vital software. Taken together, the loan write-off and the product delay might dent Ascend's record of crisp execution in recent quarters. In summer 1997 Ascend gave European customers faulty software for a different product, roiling its sales and stock. On a positive note, the company says outside of Japan it increased sales with switches. And switch revenue still was 53% higher than one year ago. Another surprise was the strength in sales of older products, the so-called "remote access" units, used for linking telecommuters and Internet surfers to networks. The remote access sales grew 29% from the prior quarter and rebounded to nearly half Ascend's revenue stream. The pros had expected very little from this technology. As reported, Ascend beat estimates by one penny, reporting profits of $66.1 million or 32 cents per share compared with $40.1 million or 20 cents a share one year earlier. Revenue grew 37% to $370.3 million from $270.4 million. Investors were not impressed. After the results were announced, after the close of market, Ascend shares fell 1 7/8 to 46 according to Reuters Instinet. >>>>