TXCC ANF AMD CBIS and LLY SAN FRANCISCO, Oct. 12 /PRNewswire/ -- The following is being issued by Robertson Stephens, a member of the National Association of Securities Dealers, CRD number 41271: October 12, 2000 Estimate Changes Applied Micro Circuits Corporation (Nasdaq: AMCC) ($167.73) F2001 EPS: $1.07 from $0.96 F2002 EPS: $1.51 from $1.30 Strong Buy Arun Veerappan, Communication Components/Semiconductor Devices "AMCC reported September quarter revenue of $97.0 million, up 31 percent quarter-over-quarter and $8.0 million better than our estimate," said Veerappan. "The strength in the quarter came once again from the company's communications business, which grew 31 percent to $80.5 million. The outlook for the third quarter is for 20 percent sequential revenue growth, with low- double-digit quarterly revenue growth expected thereafter. With AMCC executing strongly and with its technology positioning growing, we continue to rate the company's stock as a Strong Buy. In addition, we believe that AMCC has done justice to its perceived leadership position in the industry through its stellar results and, in doing so, has also served to reaffirm the continued health of the larger end-markets that it serves as well." Evolving Systems, Inc. (Nasdaq: EVOL) ($5.88) F2000 EPS: ($0.27) from $0.25 F2001 EPS: $0.31 from $0.50 Long-Term Attractive Marianne Wolk, Wireless Data "Evolving Systems pre-announced a third quarter earnings and revenue shortfall," said Wolk. "The shortfall was attributed to the delay of one significant LNP contract with an RBOC. Though the company will not recognize revenue from this contract in the third quarter, associated expenses will be recognized, resulting in much lower than expected earnings performance. We are lowering our second half of 2000 and 2001 estimates to reflect our cautious stance on the timing of the contract close and a conservative rebound timeframe for Evolving after a significant shortfall. Though we believe the contract is still on track to close, we believe there could be a 1 to 2 quarter delay as it appears to be bogged down in corporate 'red tape'. Due to the size of the contract and Evolving's percentage of completion revenue recognition policy, the contract is likely to take two quarters to be fully accounted. If the contract does close in the early fourth quarter and revenue can be recognized during that period, our new estimates for the fourth quarter of 2000 and the first quarter of 2001 may prove to be quite conservative." Paradyne Networks, Inc. (Nasdaq: PDYN) ($5.19) F2000 EPS: $0.06 from $0.41 F2001 EPS: $0.16 from $0.85 Buy Paul Johnson, Networking/Communications "Paradyne reported third quarter financial results in line with the company's guidance as of September 28, when it lowered estimates because of lower-than-expected shipments to a few network service providers," said Johnson. "The third quarter actual results are significantly lower than our original third quarter estimates of $81.0 million in revenue and fully-taxed earnings-per-share of $0.11. Overall revenues decreased 17.5 percent sequentially on the shortfall, although they did increase 8 percent year-over- year. Broadband revenues declined 22.5 percent sequentially but increased 15 percent year-over-year. Revenues from DSL and SLM products grew 43 percent year-over-year and are clearly the most important revenue drivers going forward. The majority of the shortfall in demand during the quarter can be attributed to changes in deployment plans at Dreamline, a large, well- established telecommunications carrier based in Korea. After aggressively deploying DSL equipment during the past several quarters, Dreamline has decided to change radically its strategy. Dreamline appears to have stopped their deployment schedule and, as a direct consequence, are not buying additional equipment from Paradyne. On a positive note, Paradyne has won 23 new customers for their DSL products during the September quarter. As we continue to believe that DSL demand will continue to show robust growth well into the next several years, we believe the current set-back at Paradyne is focused on a few specific customers, not a reflection of any changes in overall demand for DSL or on the competitive position of the company's products. We are reducing radically our estimates for fiscal 2000 and 2001 to reflect the dramatic shortfall in the September quarter. We believe that the stock represents one of the best investment values of the companies we follow, although with a reasonable degree of investor uncertainty." TranSwitch Corporation (Nasdaq: TXCC) ($54.94) F2000 EPS: $0.48 from $0.40 F2001 EPS: $0.72 from $0.54 Buy Networking/Communications "TranSwitch reported impressive third quarter results above published expectations," said Johnson. "The growth in revenues in the quarter came from the SONET and ATM product areas. We believe TranSwitch continues to do an excellent job of managing its financial performance. We are raising our estimates for fiscal 2000 and fiscal 2001 to reflect the higher revenues and profitability reported in the third quarter and greater confidence in the company's business model. We continue to believe that our estimates are conservative. We reiterate our Buy recommendation on the stock." Comments Abercrombie & Fitch Co. (NYSE: ANF) ($21.00) Buy Janet Kloppenburg, Specialty Retailing/Apparel Manufacturers "Abercrombie & Fitch is speaking this morning at the Robertson Stephens Consumer Conference," said Kloppenburg. "We believe this will be one of the most closely watched and noteworthy meetings of the day, and we believe investors should be particularly focused on the company's comments regarding possible inventory shortfalls during October, gross margins trends thus far in the third quarter, the strength of the current men's business, the look and/or attitude of the holiday merchandise assortments, and management's comp expectations for the remainder of fiscal 2000. We believe the stock is poised to appreciate significantly over the next six months, by at least 50 percent, as its highly fashion-right merchandise assortments should continue to generate strong full-price sales and resulting margins, in our opinion. We believe this will drive upside to our current fiscal 2000 and 2001 earnings- per-share estimates of $1.59 and $1.88, respectively." Advanced Micro Devices (NYSE: AMD) ($21.50) Long-Tem Attractive Eric Rothdeutsch, Semiconductors/Computer Hardware "We are assuming coverage of Advanced Micro Devices with a Long-Term Attractive rating," said Rothdeutsch. "AMD reported third quarter revenues of $1.21 billion, up 3.1 percent quarter-over-quarter, and earnings-per-share of $0.64, $0.02 ahead of the Consensus. Given the solid demand for Athlon and Duron processors, the company's successful ramping of its 0.18 micron copper capacity in Dresden, and continued strong sales of flash memory, we believe a 12-month price target of $30 is reasonable, or 13 times our fiscal 2001 earnings-per-share of $2.35." C-Bridge Internet Solutions (Nasdaq: CBIS) ($12.19) Strong Buy Steven Birer, eServices "C-bridge Internet Solutions plans to report earnings Thursday, October 12, after the market closes," said Birer. "In September, the company presented at our Internet conference and conveyed a very positive outlook for its business over the next several quarters. With virtually no dot.com exposure, an aggressive sales engine, above-average operational execution, and solution-based frameworks that make understanding the business benefits of using Internet technologies easier for corporate buyers, we continue to view C-bridge as one of the emerging leaders within the iBuilder category. As such, we expect the company to exceed our estimates on both the top and bottom lines. We highlight our expectation for a profitable third quarter, which is the first quarter of what we expect to be an accelerating earnings-per-share line. We believe the Company's iSolution service framework provides a competitive advantage for winning new business and successfully completing complex projects with a high level of customer satisfaction. The company has industry-leading expertise in "heavy lifting" horizontal practices such as supply chain integration, coupled with a focused strategy service offering. Moving forward, we expect to see the company's recently launched Internet- enabled customer relationship management (eCRM) service offering become a contributor to revenue. In addition, we feel C-bridge is one of the best- managed companies in our research universe." Eli Lilly and Company (NYSE: LLY) ($84.50) Buy Robert Hazlett, Large Capitalization/Specialty Pharmaceuticals "Yesterday, a 'Dear Doctor' letter was issued for Serentil, an old-line schizophrenia drug, noting that the drug has received major modifications to its label, including a significant 'black box' warning that the drug lengthens the QT interval of the heart," said Hazlett. "This action by FDA for Serentil reinforces our view that Pfizer's Zeldox will emerge with a similar 'black box' warning for QT prolongation, a significant marketing hindrance for that drug. We reiterate our Buy rating on LLY shares. We continue to believe Lilly has the industry's best late-stage product pipeline, including Zovant (sepsis), Forteo (osteoporosis), r-fluoxetine (depression), Alimta (cancer), PKC-Beta (diabetic complications) and Cialis (erectile dysfunction), all likely to be filed through 2002. We believe the recent trade-off in LLY shares due to the Prozac patent situation has more than fully priced in any revenue growth compression, providing investors an opportunity to own shares of this high-quality pharmaceutical company." Industry Updates Third Quarter Earnings Preview Andrew Jeffrey, eProcessing/ePayment "We remain steadfastly bullish on the eProcessing and ePayment sector as we head into the third quarter reporting season," said Jeffrey. "While we are recommending aggressive accumulation of 'mature' eProcessing stocks whose shares have handily outperformed the market this year, we are also enthusiastic about the prospects of certain emerging ePayment stocks that have sharply underperformed so far in 2000." Consumer Conference Update Alexandra DalPan, Multichannel Consumer Hardgoods "Six leading hardgoods retailers presented at the Robertson Stephens 2000 Consumer Conference yesterday," said DalPan. "These presentations reinforced each company's strategy, but revealed no new news. As expected, presenting companies did not focus on current business trends. Our third quarter earnings-per-share projections remain unchanged." Third Quarter 2000 Real Estate Equities Earnings Preview and Investment Outlook Jay Leupp, REITs/REOCs/Real Estate Services "For the third quarter 2000 earnings season, we expect most REITs and REOCs to post modestly positive results, with annual FFO/share growth of 9.0- 10.0 percent, driven by same-store NOI growth of 4.0-4.5 percent and external growth of 2.0-3.0 percent, with the effect of financial leverage adding 3.0- 4.0 percent," said Leupp. "We are expecting above-average same-store NOI growth the apartment and CBD office sectors, average same-store NOI growth in the suburban office, industrial, lodging and retail sectors, and below-average NOI growth in the manufactured home community, specialty and self-storage sectors." Illinois Update Harry Curtis, Gaming & Lodging Las Vegas Update Harry Curtis, Gaming & Lodging Missouri Update Harry Curtis, Gaming & Lodging Unless otherwise noted, prices are as of Wednesday, October 11, 2000 Robertson Stephens maintains a market in the shares of Applied Micro Circuits Corp., Evolving Systems, Paradyne, Transwitch, and C-Bridge and has been a managing or comanaging underwriter for or has privately placed securities of Applied Micro Circuits Corp., Evolving Systems, Paradyne, Transwitch, and C-Bridge within the past three years. Robertson Stephens, Inc. and its international affiliates ("Robertson Stephens") is the leading full-service investment bank focused exclusively on growth companies. The firm provides a comprehensive set of investment banking products and services, including equity underwriting, sales & trading, research, M&A advisory, convertible securities, private capital, equity derivatives, and corporate and executive services. Robertson Stephens completed 146 deals in the United States and Europe in the first half of 2000 valued at $48.1 billion in aggregate market value including 70 IPOs, 56 follow-ons and 20 convertible transactions. The firm also completed 47 private capital deals and advised on 43 M&A deals in the first half of this year. The firm's more than 40 senior equity research analysts cover more than 750 companies. Robertson Stephens, Inc. is a member of the NASD and all major exchanges. Robertson Stephens has more than 1,500 employees worldwide with offices in San Francisco, Boston, New York, Palo Alto, Chicago, Atlanta, London, Munich and Tel Aviv. Robertson Stephens, Inc. ("Robertson Stephens") is a NASD member and a member of all major exchanges and SIPC. The information contained herein is not a complete analysis of every material fact respecting any company, industry or security. Although opinions and estimates expressed herein reflect the current judgment of Robertson Stephens, the information upon which such opinions and estimates are based is not necessarily updated on a regular basis; when it is, the date of the change in estimate will be noted. In addition, opinions and estimates are subject to change without notice. This Report contains forward-looking statements, which involve risks and uncertainties. Actual results may differ significantly from the results described in the forward-looking statements. Factors that might cause such a difference include, but are not limited to, those discussed in "Investment Risks." Robertson Stephens from time to time performs corporate finance or other services for some companies described herein and may occasionally possess material, nonpublic information regarding such companies. This information is not used in the preparation of the opinions and estimates herein. While the information contained in this Report and the opinions contained herein are based on sources believed to be reliable, Robertson Stephens has not independently verified the facts, assumptions and estimates contained in this Report. Accordingly, no representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information and opinions contained in this Report. Robertson Stephens, its managing directors, its affiliates, its employee investment funds, and/or its employees, including the research analysts authoring this report, may have an interest in the securities of the issuer(s) described and may make purchases or sales while this Report is accessible. Robertson Stephens International, Ltd. is regulated by the Securities and Futures Authority in the United Kingdom. This publication is not meant for private customers. Fleet Specialist, Inc. (Member NYSE), an affiliate of Robertson Stephens, Inc., is the specialist that makes a market in AutoNation, Inc., Cabletron Systems, Inc., Cash America International, Inc., Computer Associates International, Ethan Allen Interiors Inc., FelCor Lodging Trust Inc., Foundation Health Systems, Inc., Harrah's Entertainment, Inc., Hilton Hotels Corporation, The Home Depot, Inc., International Game Technology, Jones Apparel Group, Inc., MGM Grand, Inc., National Semiconductor Corporation, Park Place Entertainment Corporation, Scientific-Atlanta, Inc., Seagate Technology, Inc., Shurgard Storage Centers, Inc., Station Casinos Inc., The Talbots, Inc., and Tommy Hilfiger Corporation, and at any given time, Fleet Specialist may have an inventory position, either "long" or "short", in this security. As a result of Fleet Specialist's function as a market maker, such specialist may be on the opposite side of orders executed on the floor of the Exchange in this security. Copyright * 2000 Robertson Stephens. SOURCE Robertson Stephens, Inc. -0- 10/12/2000 /CONTACT: Elizabeth Denton, 212-407-0470, for Robertson Stephens, Inc./ /Web site: http://www.rsco.com/ (FBF AMCC EVOL PDYN TXCC ANF AMD CBIS LLY) CO: Robertson Stephens, Inc.; Applied Micro Circuits Corporation; Evolving Systems, Inc.; Paradyne Networks, Inc.; TranSwitch Corporation; Abercrombie & Fitch Co.; Advanced Micro Devices; C-Bridge Internet Solutions; Eli Lilly and Company; Fleet Specialist, Inc. ST: California, New York IN: FIN SU: RTG -0- Oct/12/2000 15:27 GMT
Robertson Stephens Daily Growth Stock Update on AMCC EVOL PDYN
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