Novell (NOVL) dirt cheap, good buy? Message Board

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Technology Stocks : Novell (NOVL) dirt cheap, good buy?

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To: scott blomquist who wrote ()	3/26/1996 11:15:00 PM
From: E_K_S	of 42771

I am interested in the "groups" consensus earrnings estimates for Q2? We have some very bright investors who monitor this board and it would be interesting to hear some of your Q2 estimates for NOVELL or atleast some feedback on current expectations. Below are the three main items I believe the market will review on earnings day. 1) Q2 Sales (Gross) & NET (After Channel distribution adj) 2) Other one time adjustment to earnings TOTAL per share (including WP write down, etc) 3) Q2 Earnings per share These are my estimates: 1) Q2 Sales (Gross) $ 344.4 million (NET) $ 197.40 million 2) Other write down <$0.07/share> 3) Q2 Earning per share $0.071/share My estimates assume: a) 20% growth rate in year to year sales (excluding "Personal Productivity Application). b) 25% net profit margin (avg for years 1991,1992 & 1993) c) $24.5 million one time writedown for discontinued operations (WP) (Based on an estimate of $16 million charged in 1994 for 1,100 employee restructuring fee) d) Sell-In/Sell-out channel adjustment to Gross Sales <$147 million> which is the 30 day average based on Value Line's 1996 sales estimate. I continue to see upside surprise in Q2 numbers! The street is looking for a loss ....as large as <$0.10> per share. My estimate could be low if; (1) restructuring charge is too high, (2) sales estimate too low or (3) Channel distribution adjustment too high. Have I missed something? Will the market be happy to see NOVELL earn $0.07 for Q2? Long Term (1997 forward) I see NOVELL easily earning $1.22 or more and the stock at 20 PE s/b $25.00! Jean, Joe, VK do you concurr? EKS P.S. I am also reviewing NOVELL's partnership with UtiliCorp United which uses "NEST" Powerline Technology and trying to determine when we might see revenue additions from this technology. I am presently awaiting a call back from UtiliCorp United. You might want to check out their WEB page as it is quite interesting.

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