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

To: zbyslaw owczarczyk who wrote (11036)	4/30/1999 6:39:00 AM
From: Glenn McDougall	Read Replies (1) \| Respond to of 18016

Newbridge Networks on track for record revenue. ATM sales on fire James Bagnall Ottawa Citizen OTTAWA - Newbridge Networks Corp. seems to be on track to meeting or topping analysts' estimates for its fourth quarter, which ends today. Alan Lutz , Newbridge's chief operating officer, said yesterday the main product line -- which uses asynchronous transfer mode (ATM) technology -- has been growing at a rapid pace. Sales of ATM switches jumped 35% between the second and third quarters. Fourth-quarter sales, "will be much stronger than that." During the previous dozen quarters, ATM growth averaged only 12%. Paul Silverstein, an analyst with BancBoston Robertson Stephens, expects the firm to meet projections. "They've been pretty consistent in saying ATM is on fire." The consensus estimate calls for profit of 32¢ a share. Revenue projections range from a record $470-million to $490-million. If Newbridge does top the projections, it will be a sharp improvement over the third quarter, when the firm fell 5¢ (US) a share short of the consensus estimate. In February, it reported an unexpected shortfall in sales of older products, which use time division multiplexing technology. Another factor was the inability of Newbridge and its suppliers to keep up with the volume of ATM orders. Neither of these stumbling blocks is evident in the current quarter. ATM sales already account for more than 40% of the firm's total revenue -- and the ratio is clearly on the rise. Independent evidence of Newbridge's prowess in ATM technology came yesterday. The Yankee Group, a U.S.-based consulting organization, reported Newbridge last year grabbed a leading, 26% share of the $1.5-billion (US) global market for ATM switches used in wide area networks. The Yankee Group predicted this market niche would grow 36% a year for the next five years. Mr. Lutz said ATM technology isn't the only thing driving Newbridge's growth. Since he moved into the number two job at Newbridge last June, he has added several product lines. Two will be showcased in coming weeks, along with some major contract wins. The new product lines include: High-capacity wireless products (known as local multipoint distribution systems, or LMDS) and Internet Protocol (IP) networks. Mr. Lutz said he will unveil a detailed LMDS strategy in the weeks following the June 1 release of fourth-quarter results. In June or July, Newbridge will lay out its strategy for marrying IP and ATM networking technologies.