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

To: pat mudge who wrote (11693)	6/2/1999 6:29:00 AM
From: Glenn McDougall	Respond to of 18016

Needless to say the guidance that Alan gave for the overall year of $1.02 US vs First Call estimate of $.97 US is good news. My only concern is that the company keeps the bar (earnings) at a level that they will not miss another Q. Regards Glenn

To: pat mudge who wrote (11693)	6/2/1999 6:32:00 AM
From: Glenn McDougall	Respond to of 18016

Newbridge meets its profit forecast SIMON TUCK Technology Reporter Wednesday, June 2, 1999 Globe and Mail Ottawa -- Newbridge Networks Corp. laid to rest its tumultuous fourth quarter of fiscal 1999 yesterday, turning in a profit performance that scraped into the lower end of the struggling communications equipment maker's earnings expectations. But Newbridge said its order backlog means that it will beat analysts' earnings estimates of 97 (U.S.) cents a share for this year by about 5 cents. After the close of trading, Newbridge said it earned 12 cents a share or $33-million (Canadian) during the quarter that ended May 2 on revenue of $457-million, in line -- barely -- with its warning last month. The Kanata, Ont.-based company said May 4 that it expected to earn between 12 (U.S.) and 14 cents a share -- about one-third lower than analysts' consensus profit estimate of 21 cents -- on revenue of about $460-million (Canadian), thereby missing expectations for the fifth time in the past eight quarters. A more recent First Call Corp. survey of 21 analysts, gathered prior to the release of yesterday's figures, found an average earnings estimate of 13 cents (U.S.) a share. For the fiscal year, Newbridge earned 60 cents a share or $162-million (Canadian), not counting onetime events such as the initial and secondary public offerings of Newbridge affiliate Tundra Semiconductor Corp. Revenue for the year was $1.8-billion. Analysts said the final profit figure was a little bit disappointing but the company's ability to design a credible plan to fix its problems was more meaningful. "It's marginally disappointing that they weren't at 13 or 14 cents (U.S.)," said Duncan Stewart, a portfolio manager at Tera Capital Corp. in Toronto, "but we're looking much more for a solution." Alan Lutz, Newbridge's president and chief operating officer, acknowledged during last month's profit warning that the company has "supply management" problems and blamed its inability to keep up with bulging end-of-quarter demand for the shortfall. Company officials said it would likely take another two quarters to fix the problems but analysts said early yesterday they still weren't clear on specifically what's wrong. Mr. Lutz said yesterday that the company has already started fixing its problems. Remedies include new incentives for salespeople to land orders earlier in the quarter, closer correlation of supply and orders, and new production scheduling methods. "The task is not completed, but progress to date is good," he said. Tom Astle, a technology analyst at Midland Walwyn Capital Inc. in Toronto, said he suspects the company will begin outsourcing more of its manufacturing. "Newbridge is starting to stand out among its peers as the last of those that manufacture [that much] in-house." Mr. Lutz also said the company's order backlog is stronger than ever and that he expects the company to beat analysts' consensus earnings estimates of 97 cents for this fiscal year by about 5 cents. Newbridge shares fell 3.3 per cent or $1.35 (Canadian) to $40.15 yesterday on the Toronto Stock Exchange, near the midpoint for the stock's 52-week range. The quarterly results, however, were released after the market closed.