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Published on: 5/11/2001
Last Visited: 2/1/2003
Palo Alto, May 11, 2001 - Credit Suisse First Boston Technology Group analyst David Dusenbury initiated coverage of Digital Lightwave (DIGL) with a BUY rating and EPS estimates for FY01 and FY02 of $1.04 and $1.21, respectively.
Digital Lightwave is a fiber optic test and measurement company specializing in field services testing.The companies key products are its Network Information Computers (NICs) focused on installation and maintenance testing, and its Network Access Agents (NAAs), for the network monitoring market.
"The company has the distinction of being focused in the right industry (optical transport); the right segment (installation and maintenance) with the right product (portable 10 Gig tester) at the right time," says Dusenbury.He also notes that while communication spending is expected to contract in 2001, optical transport, and more specifically, field services and monitoring are showing relative strength.
Dusenbury believes the company is well positioned with above average capital efficiency and while the recent release of competing 10 Gig units is expected to put some pressure on margins, sales of the company's product are expected to remain strong.
Additionally in an effort to replicate its success in the US SONET market, the company has retooled its equipment capabilities and established a distribution network in an effort to gain market share in the International SDH/PDH test market.This is expected to impact sales in 2001 says Dusenbury.
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