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Technology Stocks : Intel Corporation (INTC) -- Ignore unavailable to you. Want to Upgrade?

To: t2 who wrote (75387)	3/4/1999 5:07:00 PM
From: Duker	Read Replies (1) \| Respond to of 186894

Level One Dn -2: Analyst Cited Weakened Demand For Hubs [Sucks to be this guy. --Duker] NEW YORK (Dow Jones)--Level One Communications Inc.'s (LEVL) shares fell 16.2% Thursday after Adams Harkness & Hill Inc. downgraded the company to accumulate from strong buy, citing concern over June quarter revenue growth. However, after the market closed, Intel Corp. (INTC) announced plans to acquire Level One in a $2.2 billion stock swap. The deal, in which Intel would issue 0.43 shares for each Level One share, values Level One at $48.75 a share, based on the 113 3/8 closing price of Intel shares Thursday. That's a substantial premium to Level One's closing price Thursday of 27 1/8, off 5 1/4. A total of 6.9 million shares traded, compared with average daily Nasdaq volume of 891,900. In a research note earlier, Adams Harkness analyst Tim Kellis said Level One is seeing reduced demand because of a transitional weakness in the hub market. Kellis lowered his earnings estimates for the second quarter ending in June to 28 cents a share from 30 cents. He also cut his 1999 estimate to $1.20 from $1.26, and 2000 estimate to $1.52 from $1.59. Kellis said the weakness in demand for hubs is not on account of 3Com Corp.'s (COMS) Tuesday outlook of lower than expected third-quarter earnings because Level One derives minimal revenue from 3Com. Kellis said the weakened demand, however, is short-lived and should be resolved in the September quarter. Kellis said Level One will be affected by the hub market becoming cannibalized by the switch business - a trend Kellis is forecasting. Level One, Kellis said, has a greater exposure to the hub market. Officials at Level One weren't immediately available for comment. -Zahida Hafeez; 201-938-5176