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

To: Glenn McDougall who wrote (9819)	2/24/1999 7:27:00 AM
From: Glenn McDougall	Read Replies (1) \| Respond to of 18016

Newbridge meets its revised earnings target Supply deal quandary Jill Vardy Financial Post Newbridge Networks Corp. has hired a new vice-president to overhaul its marketing and is working to undo the damage caused by news that it lost a key contract to supply wireless telecommunications equipment to its arch-rival, Cisco Systems Inc. But on a conference call last night, Newbridge executives could not give analysts what they wanted -- confirmation that the firm has finally nailed down a huge contract to supply the Global One telecommunications consortium with network equipment. Global One is expected to spend $750-million (US) upgrading its members' networks. Alan Lutz, Newbridge's president, told analysts in December the deal was imminent. "We were hoping for this contract to finally get announced. It's not I think the contract is gone. But the longer you delay the more opportunities for someone else to come in," said one analyst, who declined to be named. Mr. Lutz suggested yesterday that Newbridge has the contract, but just can't announce it. "We've taken a corporate position not to pre-announce contracts before our customer does," he said, adding there is no "negative news about the Global One situation." Kanata-based Newbridge reported net income in its fiscal third quarter ended Jan. 31 of $46-million (17¢ US a share), excluding one-time items, on revenue of $451 million. That is up from $17-million (7¢ US) in third-quarter 1998 but 5¢ (US) below analysts' expectations, as surveyed by First Call Corp. Newbridge said Feb. 4 its third-quarter earnings would be 5¢ (US) a-share lower than predicted. The firm reports its earnings in Canadian dollars but its earnings per share in U.S. dollars because the stock is mostly traded in the United States. Mr. Lutz said sales of older lines of its equipment plunged as the big markets -- Asia and South America -- were gripped by currency crises. Analysts have been counting on sales of the older equipment for about 30% of Newbridge's revenue next year. Sales of its newer ATM (asynchronous transfer mode) equipment, meanwhile, were stronger than expected. They grew by 35% in the third quarter alone. To maintain that pace, Newbridge has beefed up its sales and marketing presence in the U.S., hiring Satjiv Chahil, a Silicon Valley marketing expert, as its new executive vice-president of global marketing. "Phase one of our transformation of Newbridge into a different type of company has been completed," Mr. Lutz said. He said Newbridge has "rejuvenated" its plans for product development, including a new deal that will expand its ATM product line. Details of the deal were not disclosed.