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Technology Stocks : SOFTKEY=MERGER MANIA

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To: Thomas C. Donald who wrote (952)	3/20/1997 8:18:00 PM
From: Machaon	of 966

Estimates for the 1st quarter are .28 thru .40, with the mean estimate about .36 cents. It appears that this first quarter is normally a little slow for software sales. I've been playing with numbers. If TLC's 1st quarter sales drop 25% from the Dec96 quarter (from $106 million to $80 million), and their net profit margin drops from 25.5% (from the Dec96 qtr) to 20% because of pricing pressures and the strong dollar overseas, they will come up with about .35 EPS. This, I think, or anything close to it, would be treated fairly well by Wall Street, especially if they have 6+/- new product releases. As an example of how "new product" releases can jumpstart sales, ERTS's revenues exploded from $129 million in SEP96 to $271 million in DEC96 apparently due to "23" new product releases. That was a lot of new products. I think that I will visit some Wal-Marts and Targets and SAMS and Office Depots this weekend just to see how sales are going on a microcosm level.

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