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To: Doughboy who wrote (2189)	10/21/1998 12:26:00 PM
From: Dug	Read Replies (1) \| Respond to of 12823

DougHboy, looks like a another release of old news. Maybe someone else sees something I don't. Dug

To: Doughboy who wrote (2189)	10/21/1998 5:42:00 PM
From: MikeM54321	Read Replies (2) \| Respond to of 12823

Thread, Here's a little more detail on Ascend's recent earnings announcement. It's better written than the others I have read recently. I'm still trying to figure out if ASND is a good investment or is it the press and analysts just generally dislike them? I thought the last sentence was the most interesting, but have no idea of what will happen. MikeM(From Florida) _________________________________ Ascend falls on growth, spending concerns NEW YORK, Oct 20 (Reuters) - Shares of networking equipment maker Ascend Communications Corp. fell sharply on Tuesday, as investors voiced concerns about a leap in spending in the just completed third quarter and its future growth prospects. The stock fell to 44-7/8, off three, and traded as low as 41-1/8 on Tuesday. The slump came despite Ascend's report late Monday that third quarter earnings climbed to $0.32 a share, up from $0.20 a year and on par with Wall Street expectatons. Warburg Dillon Read analyst Nikos Theodosopoulos lowered his rating on Ascend stock to hold from buy, and cut his estimate of 1998 earnings per share to $1.17 from $1.18. He cut his fiscal 1999 earning per share projection to $1.60 from $1.65. "Ascends growth prospects going forward are dependent on ramping revenues across all product lines," Theodosopoulos said in a research note. "While we agree that the network of the future will be close to the one that Ascend (has described), we are not sure about the speed with which (it) will develop." Analysts also focused on a leap in administrative spending, to $33 million from $8 million, including a writedown of $8.6 million for loans to competitive local exchange carriers. Michael Cristinziano, an analyst at Gerard Klauer Mattison, noted that fourth quarter loans to these smaller customers would be of a similar amount. Ascend does not recognize revenue associated with customers to which it provides financing, until the loans are paid. Theodosopoulos, however, said the accounting practice may have a defensive upside. "These policies, while confusing, seem conservative and will minimize any future impact to earnings from potential bad debt from emerging carriers," he said. Cristinziano, who reduced his projection for fiscal 1999 to $1.55 from $1.60, said in a research note that he doubts Ascend's recently acquired Stratus Computer unit will add to earnings in the fourth quarter, as the company has suggested. "We continue to be cautious regarding the near-term contribution of Stratus," he said. "While the long-term strategy that has brought Ascend and Stratus together makes sense, we find it hard to believe the acquisition will be accretive in first quarter 1999." Including $50 million in revenue from Stratus, Ascend forecast revenue in the fourth quarter to be $460 million and earnings-per-share of 31 cents. The per-share amount includes about 3 cents related to the Stratus purchase. Cristinzano maintained his hold rating and said Ascend must take care to get service providers to "rapidly deploy ATM (asynchronous transfer mode) switches." "If Ascend's orders do not convert into shipments over the next six months, we believe other equipment vendors -- most notably, Cisco, Newbridge and Lucent-- will gain ATM market share at the expense of Ascend," he said.