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

To: Dennis R. Duke who wrote (8077)	11/30/1998 2:32:00 AM
From: Yiota	Read Replies (1) \| Respond to of 18016

This is from the Dow Jones News Wires, Nov 26/98 Newbridge Networks Hints Major Deal Could Come Next Week NEW YORK -(Dow Jones)- Canada's Newbridge Networks Corp. late Tuesday declined comment on rumors that the computer networking equipment maker won a major contract from the European-based Global One partnership, but hinted that an announcement of a major contract could be made next week. After U.S. and Canadian markets closed Tuesday, Newbridge (NN) posted second-quarter net income of 53.3 million Canadian dollars ($34.4 million), or 30 Canadian cents a diluted share, down from the year-ago level of around C$58 million, or 33 cents a share. Per-share earnings for the latest period, excluding items and according to U.S. accounting principles, amounted to 18 cents a share, in line with estimates. Sales rose 5.7% to C$456.8 million. The company said revenue growth was driven by double-digit growth from the previous quarter in its WAN, or wide area network, packet business. Over the past three years, Newbridge's WAN packet business has grown by 12% on average, quarter over quarter, according to Alan Lutz, who was appointed president and chief executive of the once-struggling company in July. Wednesday, the company announced a separate supply agreement with China's postal bureau, Newbridge's second Chinese deal. Terms weren't disclosed. Rumors have been circulating that Newbridge (NN) won a contract worth up to $750 million from the Global One telecommunications partnership to supply its high-speed asynchronous transfer mode, or ATM, switching technology. Global One, which provides telecommunications services around the world, consists of Sprint Corp. (FON), France Telecom (FTE) and Deutsche Telekom AG (DT). The underperforming venture has been mired in red ink. Lutz also hinted Newbridge is working on a deal to sell its wireless product to a U.S. company, but declined to provide specific details. Newbridge's share of the world-wide ATM-WAN market has been showing signs of leveling out over the last several months, while competitor Cisco Systems Inc. has seen its share increase dramatically over the same period. Cisco (CSCO), which replaced Newbridge as the market leader in world-wide ATM-WAN equipment sales in the first quarter of 1997, has been building up its sales force in this market, and benefits from its ability to offer customers a greater breadth of products than Newbridge now has available. Voice and data networking companies such as Lucent Technologies Inc. have been stockpiling promising technology and forming key alliances. Analysts say small and midsize makers of telecommunications equipment will have a difficult time remaining independent. Newbridge has been rumored as acquisition bait along Wall Street as observers wondered whether it may be forced to seek a sale if its alliance with Siemens AG falls apart or its German partner buys a competitor such as Ascend Communications Inc. Newbridge has denied the rumors, and Lutz said on Tuesday that the alliance with Siemens has been "rejuvenated" and that the two companies plan to broaden the number of products they currently offer. Copyright (c) 1998 Dow Jones & Company, Inc. All Rights Reserved.