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Technology Stocks : RSL Communications Ltd (RSLCF) -- Ignore unavailable to you. Want to Upgrade?

To: Steven Finkel who wrote (41)	4/18/1999 10:53:00 PM
From: P2V	Read Replies (2) \| Respond to of 178

Delta Three (subsidiary of RSLC) News Message 8997105

To: Steven Finkel who wrote (41)	8/3/1999 6:24:00 PM
From: Maverick	Read Replies (1) \| Respond to of 178

Lehman reiterated BUY; target $55; 2Q99 analysis lehman.com RSL Communications: Europe Delivers The Growth, Bull Case Intact, 7/27/99 * RSL's Q2 was in line, driven by the European business which grew revenues a strong 17% sequentially, providing visibility that the company's main value engine is performing. * European revenues were $178M, up $26M organically vs. Q1. RSL's gross margin expanded 220 bps vs. Q1 (100 bps higher than our estimate), driven by Europe (36.3%, 130 bps ahead of our est). Consolidated revs were up 8% vs. Q1 to $368M, vs our $372M est. with the US approx. 3% below our estimate. * We expect Europe's momentum to continue in 2H, with sequential growth in 2H averaging a healthy 15%+. Continued execution in Europe should provide fuel for the stock, and support for a sum of the parts valuation and our sum of the parts investment thesis. * Initiatives anticipated: a restructuring of the US in the next 1-2 mos (away from prepaid/wholesale), and a possible listing in Australia of RSL's business there. Along with the potential IPO of RSL's IP Telephony unit Delta Three, we believe the case for a sum-of-the parts valuation is improving. * With a solid quarter and outlook for Europe, the likely restructuring/sum of the parts initiatives ahead, and a end-user focus, we believe the bull case for RSL is intact. At 1.3X run rate revenue, RSL trades at less than half our sum of the parts which is dominated by Europe.