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Technology Stocks : Ascend Communications (ASND) -- Ignore unavailable to you. Want to Upgrade?

To: Thomas M. who wrote (56201)	10/20/1998 1:20:00 PM
From: Tulvio Durand	Read Replies (1) \| Respond to of 61433

<<These loans were accounted for as expenses, and included in the net income, not as a separate, "one-time" charge.>> That's not what is being reported. It is being reported as a one time charge and not as an ongoing cost of doing business. The criticism, as I understand it, is that instead of earning interest, the $8.7 million is being provided as an interest-free loan with some risk of non recovery, and is not being accounted for as an ongoing normal cost of doing business. cbs.marketwatch.com A charge of $8.7 million for writedowns on loans to competitive local exchange carrier customers also drew a negative response. Ascend has been providing financing of capital equipment purchases to emerging carriers, triggering concerns about exposure to risk. BancBoston Robertson Stephens analyst Paul Johnson wrote in a research note Tuesday morning that the loans should be included in the quarter's financial performance as a cost of doing business. "The net result, in our opinion, is that earnings were 30 cents per share, not the 32 cents reported," Johnson said. Ascend told analysts it expects to extend more loans in the current quarter. I fail to see, however, how the analyst comes up with 30 cents per share. The cost of money for $8.7 million should be less than a penny per share, and should not have nearly the impact that the analyst says. BWDIK, -- am not an accountant. Tulvio