Hi Vip: About EPS Estimates
>>Jack did you notice on stocksmart.com that they have Novell's estimated earnings at $0.69 per share for 1997. Is that another downward revision?<<
PMFJI, EPS of .69 for FY-97 is high. Before Q1-97 results were announced, consensus EPS was around .85, and with bad Q1 results, the estimates came down.
Looking at the last 3 quarters EPS and revenues, they are .17, .17, & .15, and 365M, 384M, & 375M, respectively. Considering that they have new releases of all major products in late Oct. 96 without being able to increase revenues and earnings, it seems to me that earnings and revenues are stagnant. Accordingly, expect revenues to range between 360M and 390M and EPS between .15 and .17 till the end of FY-97. Most likely, we get about .63 EPS for FY-97.
Altough, I am very positive about the appointment of Dr. Schmidt, I do believe it will take him time to fix the mess he got on his hands. Probably, by Q1-98 or Q2-98 we will start seeing material improvement in their financial performance. However, the market anticipates such events about 6 month in advance. According to the above, I expect the stock to trade between 9 and 13 over the next 6 months or so and then takes off to greener pastures.
Regards
Salah |
