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Technology Stocks : Whats with Proxima ?
PRXM 0.010000.0%Jan 16 9:30 AM EST
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To: Gary Vanier who wrote (46)7/24/1996 2:09:00 AM
From: Gary Vanier   of 72
 
After seeing Proxima earnings results today and Infocus two weeks ago one has to wonder how great the projector industry really is. Everyone was expecting and pre-warned that Proxima would have a disappointing quarter and they were right. Sales 35 mil and gross margins of 29% I can live with and the write down of 4mil for Laser Power and I can live with and the loss of operations of 1.9 mil or $.27. But what is hard to live with is the CFO telling Wall Street that we should look for gross margins of 30% the next two quarters and this is when 75% for next the qt and 100% of following quarter revenues will be from their new high margin products. When can Proxima start making money again? One valuable lesson I have learned with high tech stocks is once gross margins start trending down you very seldom every see them trend up again. Remember Creative Technology and Media Vison! With the projector industry looking more like a commodity type industry and the Japanese entering faster than a speeding bullet one has to wonder if margins will even been 30% next year and if their much lower it's hard to make the case for Proxima and Infocus making much money if any at all. I've been a big fan of both Proxima and Infocus and the projector industry but I can't remember ever two companies collasping as fast as these two, especially
Infocus which was $58 a few months ago and today is $15. If this is such a great industry how come nobody is making money in it?
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