First of all, the charge(s) due to DGN acquisition will be taken out by the Street...we both know that....
Estimates for EMC's next two quarter(s) are still be affected by Y2K concerns and are too low. If you look back at the estimates over the past few months, they have hardly budged from when they were taken down due to the (Merrill Lynch) Milonovich debacle when his Y2K report cut earnings for EMC, Dell and others (in April?)...Since then, Ruettgers has told analysts that he expects revenue growth closer to 35% (going forward) than 30%....no mention of margin erosion, so I am assuming this will go straight to bottom-line EPS...
So, given this, 1.04-1.07 this year looks more like 1.10-1.13 to me...it would mean that EMC would have to beat current analyst estimates by 2-3 cents (or more) the next two quarters, but given the lack of EPS (upward) revisions in quite some time, I think it is "sehr doable"..Negative information is included in estimates, but "new", positive developments of last few months have not been fully reflected, IMO.
I do expect we will see some accretion next year due to the acquisition.. |
