Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Lucent Technologies (LU) -- Ignore unavailable to you. Want to Upgrade?

To: esterina who wrote (5608)	1/19/1999 11:53:00 PM
From: Bindusagar Reddy	Respond to of 21876

ASND Conference call notes..summarized. Few notes from CC. 1. Guidance VERY POSITIVE. Expecting 490 million rev. and 36c EPS in Q1. -Deferred 15 million dollars of remote access to european customer awaiting financing. The products are shipped already. That is partly responsible for weak Access switching revenues this quarter. In reality they did 485 million revenues and add 2c to EPS. -Gross margin 61.4 % instead of 62.5% due to one time item of settling a prior account and one time hardware free upgrades. This will go away next quarter. This item was 3 million dollars. Add 1.5 c to EPS, since this expense was from prior Qaurters, -In general and Administartive expense there is a 6.8 million working capital loan. This is future earnings straight to bottom line. Add 3c to EPS, since these products are sold now, -The so called R&D write-off is on the paper, but it did not lower the taxes, resulting in higher taxes than prior Quarter responsible for 1c lower EPS. -Core switching up 41% sequentially and 208% year over year. Fantastic. -Core switching is ahead of CSCO by 12-18 months. -Ascend Signaling Gateway is hot with SP/Carriers. They did better than expected with 58 million sales. 46 million products and 12 million service. -SOME MOMENTUM IN BROADBAND ACCESS with 30+ new customers. -Brake down of sales Carriers 56%, ISP 22%, RESELLERS 22%. CORE SWITCHES 41%, ACCESS SWITCHES 33%, CARRIER SIGNALING 12%, ENTERPRISE 5%, SERVICE 6%. 73% NORTH AMERICA, 27% INT(9.3% JAPAN). Going forward, Gross margins to improve to 62%+, decrease in G&A, decrease in R&D mainly due to decrease of a 4 million that was carried from CASCADE acquisition. They are very confidant to report 1.70 EPS and 2.3-2.5 billion revenues in 1999(If they remain independant). I have a feeling from listening to the call that they deliberately deferred significant revenues to next quarter just in case they won't be beaten if god forbid deal breaks. Last but not least, there is no customer with more than 10% revenues, just in case somebody is afraid after CIENA experience. It is not going to happen, their customer base is very broad, they mentioned GTE, ATT,Bell atlantic, MCIworldcom, NTT, QWST, FRONTIER, WILLIAMS,BELLSOUTH, AND MANY MORE BLUE-CHIP COMPANIES(in EJABAT's words). In summary the call was very BULLISH, ANALysts including some doubters and NAYsayers were happy with the call. Their revenue recognition is extremely conservative. In other words they did better than the report. MY CALCULATION they could have reported 38c, if they got creative. But they were very conservative. Cash and equivalents increased from 774 million to 1.174 Billions. That is the bottom line and ASCEND is building real wealth not paper money guys. I am holding ASCEND with or wothout LUCENT. Regards, BR \|