To All who are confused by Applix's PE
In short, the P/E ratio as provided by the quote servers that you and
Doc are using are including in their calculation the one-time acquisition
cost of Target Systems. That acquisition drove the fourth quarter
earnings to a loss of $0.34/share. Without including the acquisition
cost of Target into that quarter the EPS goes to $0.33. Using this latter
figure you get a EPS for the four quarters ending Dec. of:
$0.10 + $0.13 + $0.16 + $0.33 = $0.72 (From WSJ's Briefing Book)
Using $0.72 EPS, which is the earnings from operations, you get a current
P/E of $41/$0.72 = 56.9. I've noticed that the quote servers and even
the WSJ's Briefing books don't make distinctions between operational
earnings and those that are extra-ordinary. For this reason I've always
found it wise to check the press releases associated with earnings
reports to see if there are any extras either adding to or taking away from
earnings that are outside of normal operations of the company. A case in point
that is opposite Applix's is that of Netscape. Apparently 90% of their
last quarter's earnings were from interest off their IPO. Anyhow here
is a snippet of Applix's last quarter earning report:
Applix Inc. 4Q Oper Net 33c A Share Vs Net 9c
4th Quar Dec. 31:
1995 1994
Revenues $10,376,000 $5,564,000
Net income a (3,163,000) 675,000
Avg shrs 9,299,000 7,634,000
Shr earns
Net income a (.34) .09
Figures in parentheses are losses.
a. Includes charge of $6.2 million related to acquisition of Target Systems. Excluding the charge,
net income was $3.04 million, or 33 cents a share.
All share and per-share amounts reflect conversion of preferred shares and 2- for-1 stock split
paid Dec. 26, 1995.
Applix Inc. (APLX)
Year Dec. 31:
1995 1994
Revenues $32,343,000 $18,495,000
Net income a 664,000 1,409,000
Avg shrs 10,184,000 7,114,000
Shr earns
Net income a .07 .20
a. Includes charge of $6.2 million related to acquisition of Target Systems. Excluding the charge,
net income was $6.86 million, or 67 cents a share, for the year. |
