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Non-Tech : Any info about Iomega (IOM)?
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To: Dale Stempson who wrote (8673)10/12/1996 4:27:00 PM
From: Patrick Keeler   of 58324
 
>>>
- If we use analyst's forecasts for $257 million in 3rd quarter sales, figure Iomega
can reduce costs and keep margins at 27%, figure the holdback is a wash, and add
$2 million in interest income, then we could estimate earnings before rebates to be
about $0.10. Now we can subtract the rebates:
<<<

Thanks for the post but how do you explain this:

In the 1Q96 Iomega had EPS of $0.08/share on $222 million in sales. You are using a higher revenue figure and coming up with huge declines in EPS. I don't think you can come to the figures you do unless Iomega is losing money on rebated Zip drives. They have stated that they will not lose money on drives with or without rebates.

Further, even though OEM drives are low priced they doesn't mean they have to be low margin.

Patrick
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