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

To: Chris Stovin who wrote (11691)	6/2/1999 12:31:00 AM
From: Terry Nolan	Read Replies (2) \| Respond to of 18016

Seen Stratacam get bought by Cisco. Cascade by Ascend. Ascend by Lucent. Xylan by Alcatel?. Fore by GEC. All were heavy into ATM switches. Makes me believe that Newbridge has very valuable technology. Hopefully, either their management will figure out how to make it very profitable or they will sell out at a large premium to another company who can take advantage of it. Either way I think the stock is very cheap right now for what looks like a technology that many large companies have decided is very important.

To: Chris Stovin who wrote (11691)	6/2/1999 6:35:00 AM
From: Glenn McDougall	Respond to of 18016

Newbridge expects picture to brighten Jill Vardy Financial Post OTTAWA - Newbridge Networks Corp. has a significant backlog of orders and has started fixing problems that prevented it from making record sales in the past few months, executives said yesterday. Newbridge reported net income of $33-million (18¢ a share and 12¢ a share in U.S. cents) on revenue of $457-million in its quarter ended May 2. Net earnings for the full year were $162-million (60¢ US) on $1.8-billion in revenue. Newbridge had warned on May 4 its earnings for the fourth quarter would be 12¢ to 14¢ (US) a share, well below the then 21¢ consensus estimate of analysts. The warning trimmed Newbridge's share value by more than 20% on the Toronto Stock Exchange. Alan Lutz, Newbridge's president, predicted it will take six months to overhaul production and sales operations. "I am pleased with the progress made in less than one month," he said yesterday. "We have substantially changed the process by which production is scheduled." Newbridge is also shortening the time it takes to fill an order by trimming the tests required and the number of customized features it offers. Newbridge's inability to meet orders for its high-speed switches forced it to report the worse than expected results in the fourth quarter. Newbridge has missed expectations or been forced to pre-announce earnings in five of the past eight quarters. Continued high expenses may dampen earnings during the current quarter, but for the year as a whole, the company would report earnings about 5¢ stronger than the 97¢ (US) a share expected by analysts, Mr. Lutz said. "We think the year is probably a little bit stronger than consensus estimates and the timing is a little bit less in first quarter and a little stronger in the fourth quarter," he said Fourth-quarter results excluded $6-million in one-time gains and $74-million in charges taken late in the quarter to cut costs. Those included closing some offices and cutting some older products. Including all those costs, Newbridge had a net loss of $29.8-million (17¢ or 11¢ US). Newbridge tried to explain its eroding gross margins, which fell to 56.7% in the fourth quarter from 58.3% one quarter earlier and 59.6% a year ago. Ken Wigglesworth, chief financial officer, said Newbridge's newer lines of business -- asynchronous transfer mode (ATM) equipment and Internet protocol (IP) products -- have narrower profit margins than its older lines of telecommunications equipment. Newbridge is still deciding when to unveil its entire business strategy for IP. However, the strategy is largely complete, said John Lawlor, vice-president of corporate communications. But some analysts wonder if Newbridge is behind its competitors in IP. "What I want to see is more concrete actions taken towards a cohesive operating IP strategy," said Byron Berry, an analyst at Yorkton Securities Inc.