Optical/IP Networks

Light Reading Index Marks Time

The Light Reading Index closed slightly down today, falling 9.49 (1.29%) to 728.07, as investors await a flood of earnings announcements due out over the next few weeks.

Leading the news today was the announcement by Corvis Corp. (Nasdaq: CORV) that it has successfully completed trials of its long-haul equipment with Williams Communications Group (NYSE: WCG). Corvis will begin delivery of its equipment for commercial deployment in the first quarter of 2001. The deal has been expanded to a multiyear $300 million deal from a two-year $200 million deal (see Williams Completes Corvis Trial). Corvis finished the day up $1.13 (4.89%) to $24.13.

Extreme Networks Inc. (Nasdaq: EXTR) was downgraded from a Buy to a Hold by Needham & Co., which cited the fact that the stock has risen 65 percent to $45.00 since January 3, exceeding its price target of $35.00. However, Needham analyst Tad LaFountain III comments that “Extreme is well positioned to benefit from the expansion of gigabit Ethernet in the metropolitan area network market.”

In spite of that position, Extreme is facing more competition from upstarts like Riverstone Networks, which today announced its RS 38000 Metro Core Router. Riverstone claims it will displace Extreme and Juniper Networks Inc. (Nasdaq: JNPR) in one network (see Riverstone Scores a Coup). Extreme finished the day down 3.19 (7.00%) to 42.31

Juniper, which is scheduled to report its earnings after the market close, was down 6 (4.56%) to 125.50 despite an announcement today that Ericsson AB (Nasdaq: ERICY) would be reselling more of its M-160 core routers (see Ericsson Resells Juniper Gear to Telia).

New Focus Inc. (Nasdaq: NUFO), a components manufacturer that was selected for the Number 4 position in the Light Reading Top Ten Optical Stocks for 2000 finished the day strong, up 3.19 (9.44%) to 37.63.

Applied Micro Circuits Corp. (AMCC) (Nasdaq: AMCC), a chip manufacturer, is expected to beat earnings, according to a report today from Robertson Stephens, citing strong OC48 and OC192 chip sales. AMCC is expected to beat expected revenues of 138 and earning per share of 0.14. In spite of the good news, AMCC closed down 0.94 (1.31%) to 70.69.

-- Matt Malina, research associate, Light Reading http://www.lightreading.com

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