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Technology Stocks : Scientific Atlanta -SFA- going up ??? -- Ignore unavailable to you. Want to Upgrade?

To: Ken Sandifer who wrote (494)	5/13/1999 10:35:00 PM
From: Sam	Read Replies (1) \| Respond to of 1045

See: 1. SFA post 435 on 3/8 (Buy at $26) 2. CCUR post 8595 on 5/13 at 1:27 pm (Recommending taking short term profits on SFA ($39 3/4) and GIC ($47 7/8) as they have begun to out run their demand) Note: I'll probably reenter next week. 3. Yahoo one day chart showing drops in both starting at 1:30 pm. They both have had super weeks. June will be much better as more people figure out that this is the new game.

To: Ken Sandifer who wrote (494)	5/14/1999 2:54:00 PM
From: Sam	Read Replies (1) \| Respond to of 1045

Don't think I'll wait until next week to buy back in. Sam

To: Ken Sandifer who wrote (494)	5/14/1999 9:30:00 PM
From: Alain Dubreuil	Read Replies (1) \| Respond to of 1045

Ken Value Line analysis of SFA is positive. Upgrade from 3 to 2 on a scale of 1 to 5. Alain Dubreuil We've raised our fiscal 1999 earnings estimate for Scientific-Atlanta. (Year ends July 2nd.) First-quarter sales and profits were well below year-earlier levels, depressed by economic slumps in Asia and Latin America, as well as by slower-than-expected shipments of the company's new state-of-the-art Explorer 2000 set-tops. International business remains soft, but shipments of the interactive digital converters have picked up, rising to 126,000 units (from 57,000) in the second period. The number of active digital headends is expanding, and Explorer 2000 shipments could exceed 320,000 in the second half. Investors should note, however, that S-A's quarter-to-quarter results may be volatile, at least near term, as cable MSO (multiple systems operators) deployment schedules are difficult to predict and their inventories have grown quite large; December-period earnings were significantly above consensus expectations. Our revised share-net target for this year is $0.65, up $0.15. The company's per-share profits could rise by as much as 70% next year. Seventeen MSOs in North America, with more than 17 million subscribers, have committed to deploy S-A's digital interactive system. Approximately 15 systems have launched service, and Time-Warner, the company's largest customer, serving roughly 13 million subscribers, should begin deploying the Explorer 2000 shortly. In all, shipments may well exceed 1 million units in fiscal 2000. Meantime, although a meaningful improvement in international revenues, mainly satellite, isn't likely anytime soon, a recently completed restructuring program should allow the business to help the bottom line, which would be the case even if it just broke even. Operating margins ought to also expand next year, helping lift earnings to $1.10 a share. (Note: The year-to-year comparison is aided by the ghastly first quarter in 1999.) This issue is neutrally ranked for the year ahead, though. Profits will likely rise at a healthy double-digit rate through 2002-2004, as digital deployment is still in the early stages. But we don't have a strong 3- to 5-year position, either, due to the current valuation. We may raise our long-term price targets if shipments meet expectations and became more predictable. George Rho April 9, 1999 SUPPLEMENT 5/14/99 Scientific-Atlanta reported earnings of $0.25 a diluted share for the third quarter of fiscal 1999 (years end in late June), excluding a $0.02-a-share one-time capital gain. It earned $0.22 in last year's comparable period, and our estimate was for only $0.19. Revenues increased by 11%, driven by a 29% increase in North American sales of broadband equipment to cable-television operators. The company's best year-over-year top- and bottom-line advance in about two years illustrates the accelerating momentum towards advanced interactive digital networks. The results also reflect the benefits of economies of scale, as well as Scientific's cost-reduction measures. We've added $0.07 and $0.10 to our share-net estimates for fiscal 1999 and 2000, respectively, which now stand at $0.72 and $1.20. This issue's Timeliness rank has also been raised a notch, to 2 (Above Average). G.R.