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Technology Stocks : PairGain Technologies -- Ignore unavailable to you. Want to Upgrade?

To: J. Kittle who wrote (27765)	12/27/1998 6:39:00 PM
From: Rainmaker	Read Replies (1) \| Respond to of 36349

4Q Earnings Projection 3Q Revenues $76,386 Total Expenses $64,400 Net Income $11,986 EPS Shares (basic) 70,589 $0.17 Shares (diluted) 74,632 $0.16 T1/E1 64% $48,887 PG Family 24% $18,333 Campus 6% $4,583 OEM (T1/E1) 2% $1,528 Megabit 2% $1,528 Royalties 2% $1,528 100% $76,386 4Q 1998 Estimate Assuming +6% seq REV T1/E1 60% $44,047 <BA's 10% = -15% REV PG Family 27% $19,433 Campus 7% $4,858 OEM (T1/E1) 2% $1,528 No increase Megabit 2% $1,619 Royalties 2% $1,528 No increase 100% $73,013 4Q ESTIMATE $73,013 Total Expenses $65,688 +2%(Pascoe,<volume,etc) Net Income $7,325 EPS Shares (basic) 70,589 $0.10 Shares (diluted) 74,632 $0.10 First Call estimate => $0.10 If 7M (10%) Buyback COMPLETED EPS Shares (basic) 63,530 $0.12 Shares (diluted) 67,169 $0.11 Cash in Bank 3Q 1998 $221M 4Q 1998 increase $7.3M Less Buyback $50M+ ($7-8/share X 7M) 4Q 1998 $175M Notes: 1) 3Q 1998 numbers from press release 2) Est. +6% sequential revenue from latest CC 3) BA T1 business was 10% of overall HDSL; loss = 15% revenue loss (weighted) per CC Opinions, hopes, what Santa missed, etc.: 1) HDSL pricing pressures alleviated (prices stabilize; discrete collusive increases to grow earnings/profits) 2) PG Family sales surpasses 6% seq. growth 3) International HDSL sales offsets BA losses (been growing at >40% annually per CC) 4) HDSL sales to other accounts continue +19% quarter surprise (like 3Q) 5) HDSL pricing pressures alleviated 6) 4Q expenses less than +2% 7) Avidia contracts announced with FON, T, MCI and/or USWest during 4Q CC (also with CLECs) 8) Pascoe announces alliances with NN & NT (both Canadian firms - where Pascoe's from) 9) Alliances with backbone supplier for "total Solution" (ie: TLAB, LU, ALA, etc) 10)ROK (CNXT) announces shipments of Falcon modems and new CNXT/AMD ADSL chipset for PCs INTC partnered with Tut Systems. Previous announcements of ADSL modems for PCs (Dell, Compaq, etc) are based on CAP which is first generation technology; DSLAM is next generation and is expected to dominate because of significantly OVERALL better performance. Avidia is a DSLAM and can support CAP/HDSL/fiber configurations. This is its VERY unique feature; what Pascoe (and PAIR) is excited about; and separates PAIR from other DSLAM products on the market (but maintains interoperability!). Here's to a winning 1999 for PAIR. Good luck all!