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

To: Dennis R. Duke who wrote (8216)	12/2/1998 9:36:00 PM
From: pat mudge	Read Replies (1) \| Respond to of 18016

CS's problems are company-specific. . . <<< December 2, 1998 <Picture> Dow Jones Newswires Cabletron Gives 3Q Warning; Analysts See Credibility Issues NEW YORK -- For the second straight year, Cabletron Systems Inc. (CS) said it will miss Wall Street's third-quarter expectations, saying late Wednesday it will record an operating loss of 10 cents a share for the period. Analysts blamed the shortfall on a number of things, including a back-end loaded quarter - or contracts closing the last few days of the quarter - and lost business from Northern Telecom Ltd. (NT), which purchased Cabletron's competitor Bay Networks earlier this year. Over the past two years, Cabletron has preannounced four disappointing quarters, analysts said. The news sent Cabletron stock down 4 1/2, or more than 25%, in after-market dealings. At 4:47 p.m. EST, it traded at 10 1/4, according to Reuters Instinet, off its regular-session close of 13 3/4, down 1/2, or 3.5%. Market players said they expect the stock to fall sharply Thursday following the warning. The computer-network equipment maker said it will post an operating loss of about 10 cents a share, before charges, on revenue of $330 million to $340 million. According to First Call Corp., analysts had foreseen net income of 11 cents a share. In its press release, the company said "significant" pricing pressures, shifts in technology and longer market acceptance time contributed to the expected third-quarter loss. Company officials weren't immediately available for comment. Analysts believe Cabletron's problems are company-specific rather than industrywide. The fourth quarter should be good for "most of the players" in the networking sector, said Stephen Koffler, of Donaldson Lufkin & Jenrette Securities Corp. NationsBanc Montgomery Securities Inc. analyst Alfred Tobia noted that the company has had trouble forecasting earnings. Other market players indicated the company might have credibility problems because of the high number of profit warnings over the past two years. Some analysts said Wall Street will cut its fiscal 2000 earnings expectations to between 40 cents and 55 cents a share. Analysts had expected the company to earn 69 cents a share for that period, which ends in March 2000. >>>>