Robertson Stephens Daily Growth Stock Update on GLW, AKAM, CDN, NAUT, NENG, MLNM

Apr 05, 2001, 01:00 ET from Robertson Stephens, Inc.

    SAN FRANCISCO, April 5 /PRNewswire/ -- The following is being issued by
 Robertson Stephens:
 
     Initiation of Coverage:
 
     Corning Incorporated
     (NYSE:   GLW) US $19.00
     Long-Term Attractive
     2000A EPS: $1.23
     2001E EPS: $1.15, New
 
     Arun Veerappan, Communications Components/Semiconductor Devices
     "Corning is the world's dominant provider of optical fiber and a leader in
     active optical components targeting the submarine, long haul, metro, and
     access communications markets," said Veerappan. "In addition to the
     communications end-market, Corning has established a leading presence in
     several other high-growth areas such as LCD information display,
     biotech/genomics, semiconductor capital equipment and environmental
     markets. Although Corning's valuation is largely driven by its
     telecommunications segment, we believe its portfolio approach diversifies
     risk of any particular business line and enables the company to capitalize
     on fast growing end-markets. However, Corning has not been (and cannot be)
     immune to the current decline in telecommunications spending and inventory
     overhang, in our view. Indeed, on March 19, Corning reduced EPS guidance
     for 2001 from $1.40-$1.43 to $1.20-$1.30 and revenue guidance from about
     $8.8 billion to $8.2-$8.5 billion. Corning has also announced measures to
     cut costs and reduce manufacturing headcount in order to maintain EPS
     estimates.   Our EPS estimate for the company's March quarter is $0.28 on
     revenue of $1,921 million (down 10.4% q/q). Our 2001 EPS estimate is $1.15
     (down 7% y/y) on revenue of $7,775 million (up 7% y/y), and our 2002 EPS
     estimate is $1.35 (up 18% y/y) on revenue of $8,655 million (up 11% y/y).
     We believe that Corning is well positioned to capitalize on the projected
     long-term growth of the telecommunications market.  However, due to the
     current softness in service provider spending plans and their direct
     impact on Corning's business, we are initiating coverage of Corning shares
     with a Long-Term Attractive rating."
 
     Rating Changes:
 
     Akamai Technologies, Inc.
     (Nasdaq: AKAM) $6.00
     Downgrading to Long-Term Attractive from Buy
     2001E EPS: ($1.96), up from ($2.25)
 
     Richard Juarez, eCommerce Infrastructure Services
     "Yesterday, Akamai announced that its FY 1Q01 revenue would fall short of
     expectations," said Juarez. "The company also lowered its revenue outlook
     for FY01. We believe that given the deterioration in the macroeconomic
     environment and in IT spending, visibility for the rest of the year
     remains poor and continued dot-com churn is likely given that dot-com
     companies represented 25% of revenue in 4Q00. We are revising our FY01
     estimates.  We are lowering our FY01 revenue estimate to $175.3 million
     from $242.3 million and are improving our estimated FY01 EPS before non-
     cash and one-time items to ($1.96) from ($2.25).  We are lowering our
     rating to Long- Term Attractive from Buy to reflect our expectations of
     slower growth due to continued weakness from (1) a deteriorating
     macroeconomic and IT spending environment, (2) longer sales cycles, and
     (3) the continuing fallout of dotcom customers.  While we believe that
     much of the downside has already been factored into the share price, we
     believe the shares could see additional near-term weakness as investors
     digest the reduced revenue expectations.  Nonetheless, we believe that
     Akamai remains the clear leader in the content distribution and delivery
     industry, and in the longer term we believe that the company's technology
     and products do solve important problems in Internet infrastructure in a
     cost-effective manner."
 
     Estimate Changes:
 
     Cadence Design Systems, Inc.
     (NYSE:   CDN) $16.69
     Buy
     2001E EPS: $0.80, down from $0.87
 
     John Barr, Design Enabling Technologies
     "We believe Cadence is on track to achieve our EPS estimate of $0.14 in
     1Q01," said Barr. "We are reducing our revenue estimate to $339 million,
     below the previous $345 million as a result of our lowered expectations of
     service revenue, the area we believe is most vulnerable. We are also
     lowering our outlook for the balance of 2001. Over the last few weeks, we
     believe that it has become apparent that the semiconductor industry and
     its customers are looking at a more than 10% down year.  As a result, we
     are modifying our license growth expectations for the EDA industry for
     2001 to 12% to 13%. We believe this change in our view of the macro
     environment most affects Cadence.  We had previously modeled license
     revenue growth of 26% for Cadence in 2001 and now show 23%.   Our Mentor
     Graphics (MENT, $18.81, Buy) model shows just 16% growth and our Synopsys
     (SNPS, $45.63, Buy) model is built on 10-12% bookings growth.  As a
     result, we believe Cadence could be the most affected by our reduced macro
     view. We maintain our Buy rating.  At $16.95 per share Cadence is valued
     at 21x our 2001 EPS estimate.  We would look for appreciation in the next
     12 months based on the growth in Cadence's earnings."
 
     Nautica Enterprises, Inc.
     (Nasdaq: NAUT) $16.88
     Buy
     F2001E: $1.38, up from $1.37
     F2002E: $1.49, up from $1.47
 
     Janet Joseph Kloppenburg, Specialty Retailing/Apparel Manufacturing
     We are raising our Q4:01 EPS estimate for Nautica Enterprises by $0.01 to
     $0.39 from $0.38 prior and vs. $0.28 in Q4:00, as we believe Nautica's
     classic sportswear collection maintained strong sales and margin trends
     throughout Q4:01," said Kloppenburg. "We now expect Nautica to post F2001
     EPS growth of 9.4% to $1.38 from $1.26 in F2000, in-line with management's
     guided range of $1.37 to $1.39.  Nautica reports Q4:01 and F2001 EPS on
     Tuesday, April 24, 2001 at 9:00 AM. In addition, on Tuesday, April 3,
     Nautica announced a strategic decision to terminate its childrenswear
     license with Hampton Industries and to bring the childrenswear line in-
     house. Importantly, the company expects the license termination to have no
     impact on the sourcing or distribution of the childrenswear line and plans
     the childrenswear business to be accretive by approximately $0.01 to $0.02
     in F2002. As a result of the company's decision to bring the childrenswear
     business in-house, we are raising our F2002 EPS estimate by $0.02 to $1.49
     from $1.47 prior. Notably, our $1.49 EPS estimate includes $0.08 of one-
     time expenses related to the Martinsville, Virginia distribution center,
     and we believe Nautica can achieve C2001 operating EPS of $1.57 excluding
     these one-time expenses. We maintain our $24 price target and Buy rating
     on Nautica shares."
 
     Network Engines, Inc.
     (Nasdaq: NENG) $0.88
     Long-Term Attractive
     F2001E EPS: Under Review, from ($1.06)
     F2002E EPS: Under Review, from ($0.48)
 
     Dane Lewis, Infrastructure: Systems & Software
     "Yesterday, Network Engines pre-announced significant shortfall to FQ2:01
     revenue estimates," said Lewis. "Macroeconomic conditions and the current
     IT spending environment had a considerable impact on Network Engine's
     sales this quarter.  Consistent with our views, macroeconomic conditions
     in North America caused companies across the board to halt or delay IT
     spending.  Furthermore, Network Engines' customer base is comprised
     largely of a dot.coms who are experiencing particular weakness, many of
     whom have shut down or have limited access to capital.  The company is
     making efforts to gain more enterprise vs. dot.com customers, however,
     this has been a slow transition. The company expects its cash balance to
     be approximately $88 million at the end of the quarter.  The company
     expects to burn $25 million in cash this quarter, $15 million of which is
     the result of an inventory write-down.  We expect the company to continue
     burning approximately $9-10 million per quarter going forward.  However,
     John Curtis, the company's newly appointed CEO, is making cash
     conservation a top priority. We are placing our estimates under review as
     there is very limited visibility.  Management plans provide guidance on
     future quarters during their quarterly conference call which will be held
     during the week of April 30."
 
     Comments:
 
     Millennium Pharmaceuticals, Inc.
     (Nasdaq: MLNM) $26.35
     Strong Buy
 
     Michael King, Biopharmaceuticals
     "Millennium Pharmaceuticals hosted its annual analyst day yesterday at the
     Royal Sonesta Hotel in Cambridge, Mass," said King. "The company spent the
     morning focused on its Oncology franchise, in particular on PS-341, a
     proteasome inhibitor currently in Phase II trial for Multiple Myeloma.
     Millennium also plans to commence Phase II trials later this year for the
     treatment of chronic lymphocytic leukemia (CLL). Additionally, MLNM plans
     to initiate several Phase Ib trials this year in combination with other
     cytotoxic chemotherapeutic compounds for the treatment of solid tumors
     including pancreatic, colorectal, prostate, and breast cancer. PS-341 has
     been very well-tolerated in early human studies and could have the
     potential to be a blockbuster therapy in oncology. Investigators we have
     spoken with place PS-341 in a category just behind EGF-receptor
     antagonists in terms of market potential in cancer. Millennium spent less
     time yesterday discussing its lead program CAMPATH, in our view
     demonstrating the greater ownership and market opportunity of PS-341 for
     the company. Nonetheless, we remain confident that the FDA will grant
     final approval of CAMPATH in the near term and anticipate the antibody
     will receive Marketing Authorization in Europe in July. Mark Levin,
     Chairman, President and CEO of Millennium gave the key note address and
     laid out bold goals to transform Millennium into a $100 billion market cap
     pharmaceutical company by the year 2010 with 8-10 products on the market
     and more than 20 compounds in the clinic. We reiterate our Strong Buy
     rating."
 
     Industry Updates:
 
     Broadline Retail
 
     Bill Dreher, Broadline Retailing: Discount & Department Stores
     "On Thursday, April 12, most retailers will report sales results for the
     five-week month of March 2001," said Dreher. "For the first four weeks of
     March, same-store sales results for the broadline retailers continue to
     trend at or modestly below plan. Comps are likely to continue to show
     modest improvement from February, but unlikely to show much in the way of
     upside surprise, with the possible exception of Kohl's and BJ's. We are
     becoming more positive on the state of consumer spending and consumer
     confidence, which while clearly no longer enjoying the all-time highs of
     last year, have remained respectable and are now rising.  We believe
     consumer spending is beginning to develop a bottom and a foundation to
     build from going forward. In addition, broadline retailers will now begin
     to cycle the widespread fashion miss, which began last spring and
     particularly impacted the women's ready to wear apparel. Finally, starting
     in the second quarter, year-over-year sales comparisons finally turn much
     easier for most broadline retailers.   We suspect these factors could
     translate into accelerating growth of broadline retail sales, and while
     most strong operators have shown increases, they will begin to climb to
     the more robust mid-single-digit, and even upper single digit level
     enjoyed in the beginning of last year and further back."
 
     Next Generation Networks
 
     Paul Johnson, Communications/Networking
     "We believe that there is significant seasonality associated with carrier
     capital spending that has not been well understood by investors, but may
     become a critical issue when evaluating quarterly carrier capital
     spending," said Johnson. "The significant (43.4%) sequential decline that
     our seasonality based method projects for first quarter capital
     expenditures may raise significant questions among investors.  After all,
     a $16.3 billion capital spending estimate for the first quarter implies a
     2001 run rate of only $65 billion -- down 41% from last year's total and
     significantly lower than our current estimate of roughly $87 billion for
     2001.  Therefore, with no growth projected for overall spending this year,
     the traditional seasonality in the March quarter will be more pronounced.
     We believe it is imperative that investors take seasonality into account
     when following carrier capital expenditures because, in our opinion,
     seasonality cuts both ways.  In the face of a significant decline in
     capital expenditures in the March quarter, we believe that there may be a
     rebound in spending in the June quarter followed by a second large
     increase in the December quarter -- rendering the $65 billion run rate
     based on the March quarter misleading and our forecast of $87 billion
     reasonable."
 
     Unless otherwise noted, prices are as of Wednesday, April 4, 2001.
 
     Robertson Stephens maintains a market in the shares of Akamai
 Technologies, Nautica Enterprises, Network Engines, Millennium
 Pharmaceuticals, Mentor Graphics and Synopsys and has been managing or
 comanaging underwriter for or has privately placed securities of Akamai
 Technologies, Network Engines and Millennium Pharmaceuticals 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, Inc. is
 a member of the NASD and all major exchanges. Robertson Stephens has more than
 1,400 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
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 "Investment Risks." Robertson Stephens from time to time performs corporate
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 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
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 publication is not meant for private customers.
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 Stephens, Inc., is the specialist that makes a market in  Alcatel, AutoNation,
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     Copyright (C) 2001 Robertson Stephens
 
     Robertson Stephens is a member of the National Association of Securities
 Dealers, CRD number 41271.
 
 

SOURCE Robertson Stephens, Inc.
    SAN FRANCISCO, April 5 /PRNewswire/ -- The following is being issued by
 Robertson Stephens:
 
     Initiation of Coverage:
 
     Corning Incorporated
     (NYSE:   GLW) US $19.00
     Long-Term Attractive
     2000A EPS: $1.23
     2001E EPS: $1.15, New
 
     Arun Veerappan, Communications Components/Semiconductor Devices
     "Corning is the world's dominant provider of optical fiber and a leader in
     active optical components targeting the submarine, long haul, metro, and
     access communications markets," said Veerappan. "In addition to the
     communications end-market, Corning has established a leading presence in
     several other high-growth areas such as LCD information display,
     biotech/genomics, semiconductor capital equipment and environmental
     markets. Although Corning's valuation is largely driven by its
     telecommunications segment, we believe its portfolio approach diversifies
     risk of any particular business line and enables the company to capitalize
     on fast growing end-markets. However, Corning has not been (and cannot be)
     immune to the current decline in telecommunications spending and inventory
     overhang, in our view. Indeed, on March 19, Corning reduced EPS guidance
     for 2001 from $1.40-$1.43 to $1.20-$1.30 and revenue guidance from about
     $8.8 billion to $8.2-$8.5 billion. Corning has also announced measures to
     cut costs and reduce manufacturing headcount in order to maintain EPS
     estimates.   Our EPS estimate for the company's March quarter is $0.28 on
     revenue of $1,921 million (down 10.4% q/q). Our 2001 EPS estimate is $1.15
     (down 7% y/y) on revenue of $7,775 million (up 7% y/y), and our 2002 EPS
     estimate is $1.35 (up 18% y/y) on revenue of $8,655 million (up 11% y/y).
     We believe that Corning is well positioned to capitalize on the projected
     long-term growth of the telecommunications market.  However, due to the
     current softness in service provider spending plans and their direct
     impact on Corning's business, we are initiating coverage of Corning shares
     with a Long-Term Attractive rating."
 
     Rating Changes:
 
     Akamai Technologies, Inc.
     (Nasdaq: AKAM) $6.00
     Downgrading to Long-Term Attractive from Buy
     2001E EPS: ($1.96), up from ($2.25)
 
     Richard Juarez, eCommerce Infrastructure Services
     "Yesterday, Akamai announced that its FY 1Q01 revenue would fall short of
     expectations," said Juarez. "The company also lowered its revenue outlook
     for FY01. We believe that given the deterioration in the macroeconomic
     environment and in IT spending, visibility for the rest of the year
     remains poor and continued dot-com churn is likely given that dot-com
     companies represented 25% of revenue in 4Q00. We are revising our FY01
     estimates.  We are lowering our FY01 revenue estimate to $175.3 million
     from $242.3 million and are improving our estimated FY01 EPS before non-
     cash and one-time items to ($1.96) from ($2.25).  We are lowering our
     rating to Long- Term Attractive from Buy to reflect our expectations of
     slower growth due to continued weakness from (1) a deteriorating
     macroeconomic and IT spending environment, (2) longer sales cycles, and
     (3) the continuing fallout of dotcom customers.  While we believe that
     much of the downside has already been factored into the share price, we
     believe the shares could see additional near-term weakness as investors
     digest the reduced revenue expectations.  Nonetheless, we believe that
     Akamai remains the clear leader in the content distribution and delivery
     industry, and in the longer term we believe that the company's technology
     and products do solve important problems in Internet infrastructure in a
     cost-effective manner."
 
     Estimate Changes:
 
     Cadence Design Systems, Inc.
     (NYSE:   CDN) $16.69
     Buy
     2001E EPS: $0.80, down from $0.87
 
     John Barr, Design Enabling Technologies
     "We believe Cadence is on track to achieve our EPS estimate of $0.14 in
     1Q01," said Barr. "We are reducing our revenue estimate to $339 million,
     below the previous $345 million as a result of our lowered expectations of
     service revenue, the area we believe is most vulnerable. We are also
     lowering our outlook for the balance of 2001. Over the last few weeks, we
     believe that it has become apparent that the semiconductor industry and
     its customers are looking at a more than 10% down year.  As a result, we
     are modifying our license growth expectations for the EDA industry for
     2001 to 12% to 13%. We believe this change in our view of the macro
     environment most affects Cadence.  We had previously modeled license
     revenue growth of 26% for Cadence in 2001 and now show 23%.   Our Mentor
     Graphics (MENT, $18.81, Buy) model shows just 16% growth and our Synopsys
     (SNPS, $45.63, Buy) model is built on 10-12% bookings growth.  As a
     result, we believe Cadence could be the most affected by our reduced macro
     view. We maintain our Buy rating.  At $16.95 per share Cadence is valued
     at 21x our 2001 EPS estimate.  We would look for appreciation in the next
     12 months based on the growth in Cadence's earnings."
 
     Nautica Enterprises, Inc.
     (Nasdaq: NAUT) $16.88
     Buy
     F2001E: $1.38, up from $1.37
     F2002E: $1.49, up from $1.47
 
     Janet Joseph Kloppenburg, Specialty Retailing/Apparel Manufacturing
     We are raising our Q4:01 EPS estimate for Nautica Enterprises by $0.01 to
     $0.39 from $0.38 prior and vs. $0.28 in Q4:00, as we believe Nautica's
     classic sportswear collection maintained strong sales and margin trends
     throughout Q4:01," said Kloppenburg. "We now expect Nautica to post F2001
     EPS growth of 9.4% to $1.38 from $1.26 in F2000, in-line with management's
     guided range of $1.37 to $1.39.  Nautica reports Q4:01 and F2001 EPS on
     Tuesday, April 24, 2001 at 9:00 AM. In addition, on Tuesday, April 3,
     Nautica announced a strategic decision to terminate its childrenswear
     license with Hampton Industries and to bring the childrenswear line in-
     house. Importantly, the company expects the license termination to have no
     impact on the sourcing or distribution of the childrenswear line and plans
     the childrenswear business to be accretive by approximately $0.01 to $0.02
     in F2002. As a result of the company's decision to bring the childrenswear
     business in-house, we are raising our F2002 EPS estimate by $0.02 to $1.49
     from $1.47 prior. Notably, our $1.49 EPS estimate includes $0.08 of one-
     time expenses related to the Martinsville, Virginia distribution center,
     and we believe Nautica can achieve C2001 operating EPS of $1.57 excluding
     these one-time expenses. We maintain our $24 price target and Buy rating
     on Nautica shares."
 
     Network Engines, Inc.
     (Nasdaq: NENG) $0.88
     Long-Term Attractive
     F2001E EPS: Under Review, from ($1.06)
     F2002E EPS: Under Review, from ($0.48)
 
     Dane Lewis, Infrastructure: Systems & Software
     "Yesterday, Network Engines pre-announced significant shortfall to FQ2:01
     revenue estimates," said Lewis. "Macroeconomic conditions and the current
     IT spending environment had a considerable impact on Network Engine's
     sales this quarter.  Consistent with our views, macroeconomic conditions
     in North America caused companies across the board to halt or delay IT
     spending.  Furthermore, Network Engines' customer base is comprised
     largely of a dot.coms who are experiencing particular weakness, many of
     whom have shut down or have limited access to capital.  The company is
     making efforts to gain more enterprise vs. dot.com customers, however,
     this has been a slow transition. The company expects its cash balance to
     be approximately $88 million at the end of the quarter.  The company
     expects to burn $25 million in cash this quarter, $15 million of which is
     the result of an inventory write-down.  We expect the company to continue
     burning approximately $9-10 million per quarter going forward.  However,
     John Curtis, the company's newly appointed CEO, is making cash
     conservation a top priority. We are placing our estimates under review as
     there is very limited visibility.  Management plans provide guidance on
     future quarters during their quarterly conference call which will be held
     during the week of April 30."
 
     Comments:
 
     Millennium Pharmaceuticals, Inc.
     (Nasdaq: MLNM) $26.35
     Strong Buy
 
     Michael King, Biopharmaceuticals
     "Millennium Pharmaceuticals hosted its annual analyst day yesterday at the
     Royal Sonesta Hotel in Cambridge, Mass," said King. "The company spent the
     morning focused on its Oncology franchise, in particular on PS-341, a
     proteasome inhibitor currently in Phase II trial for Multiple Myeloma.
     Millennium also plans to commence Phase II trials later this year for the
     treatment of chronic lymphocytic leukemia (CLL). Additionally, MLNM plans
     to initiate several Phase Ib trials this year in combination with other
     cytotoxic chemotherapeutic compounds for the treatment of solid tumors
     including pancreatic, colorectal, prostate, and breast cancer. PS-341 has
     been very well-tolerated in early human studies and could have the
     potential to be a blockbuster therapy in oncology. Investigators we have
     spoken with place PS-341 in a category just behind EGF-receptor
     antagonists in terms of market potential in cancer. Millennium spent less
     time yesterday discussing its lead program CAMPATH, in our view
     demonstrating the greater ownership and market opportunity of PS-341 for
     the company. Nonetheless, we remain confident that the FDA will grant
     final approval of CAMPATH in the near term and anticipate the antibody
     will receive Marketing Authorization in Europe in July. Mark Levin,
     Chairman, President and CEO of Millennium gave the key note address and
     laid out bold goals to transform Millennium into a $100 billion market cap
     pharmaceutical company by the year 2010 with 8-10 products on the market
     and more than 20 compounds in the clinic. We reiterate our Strong Buy
     rating."
 
     Industry Updates:
 
     Broadline Retail
 
     Bill Dreher, Broadline Retailing: Discount & Department Stores
     "On Thursday, April 12, most retailers will report sales results for the
     five-week month of March 2001," said Dreher. "For the first four weeks of
     March, same-store sales results for the broadline retailers continue to
     trend at or modestly below plan. Comps are likely to continue to show
     modest improvement from February, but unlikely to show much in the way of
     upside surprise, with the possible exception of Kohl's and BJ's. We are
     becoming more positive on the state of consumer spending and consumer
     confidence, which while clearly no longer enjoying the all-time highs of
     last year, have remained respectable and are now rising.  We believe
     consumer spending is beginning to develop a bottom and a foundation to
     build from going forward. In addition, broadline retailers will now begin
     to cycle the widespread fashion miss, which began last spring and
     particularly impacted the women's ready to wear apparel. Finally, starting
     in the second quarter, year-over-year sales comparisons finally turn much
     easier for most broadline retailers.   We suspect these factors could
     translate into accelerating growth of broadline retail sales, and while
     most strong operators have shown increases, they will begin to climb to
     the more robust mid-single-digit, and even upper single digit level
     enjoyed in the beginning of last year and further back."
 
     Next Generation Networks
 
     Paul Johnson, Communications/Networking
     "We believe that there is significant seasonality associated with carrier
     capital spending that has not been well understood by investors, but may
     become a critical issue when evaluating quarterly carrier capital
     spending," said Johnson. "The significant (43.4%) sequential decline that
     our seasonality based method projects for first quarter capital
     expenditures may raise significant questions among investors.  After all,
     a $16.3 billion capital spending estimate for the first quarter implies a
     2001 run rate of only $65 billion -- down 41% from last year's total and
     significantly lower than our current estimate of roughly $87 billion for
     2001.  Therefore, with no growth projected for overall spending this year,
     the traditional seasonality in the March quarter will be more pronounced.
     We believe it is imperative that investors take seasonality into account
     when following carrier capital expenditures because, in our opinion,
     seasonality cuts both ways.  In the face of a significant decline in
     capital expenditures in the March quarter, we believe that there may be a
     rebound in spending in the June quarter followed by a second large
     increase in the December quarter -- rendering the $65 billion run rate
     based on the March quarter misleading and our forecast of $87 billion
     reasonable."
 
     Unless otherwise noted, prices are as of Wednesday, April 4, 2001.
 
     Robertson Stephens maintains a market in the shares of Akamai
 Technologies, Nautica Enterprises, Network Engines, Millennium
 Pharmaceuticals, Mentor Graphics and Synopsys and has been managing or
 comanaging underwriter for or has privately placed securities of Akamai
 Technologies, Network Engines and Millennium Pharmaceuticals 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, Inc. is
 a member of the NASD and all major exchanges. Robertson Stephens has more than
 1,400 employees worldwide with offices in San Francisco, Boston, New York,
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