*Do you expect record earnings? At a minimum, I'm expecting record sales. Hoping for earnings of at least $.16/share.*
Earnings should be real good. $0.16 or $0.17. Looking forward the company should be able to garner $0.61 to $0.67 for the year barring any additional employee related expenses. This works out to a growth rate of between 28% to 39% bottom line (diluted). We will see.
I recently spoke with Netro (NTRO) and Newbridge Networks (NN) regarding their broadband (primarily LMDS) equipment rollout. You may recall that both of these companies, NN through Stanford Telecom, have signed sole source component agreements with our friends at VARL. Between these two companies, they probably (depends who you ask, and where you look) have in excess of 60% of the worldwide LMDS equipment sales.
NTRO is in 23 trials worldwide, and has installed 6 systems. NN is in 15 trials worldwide, has 15 quote wins (no $$ received) and 30 are in negotiations, with 1 system in place.
Anyway, my point is that this really could be a significant revenue generator going forward. VARL receives approximately $14 per broadband component versus ~$2 for a handset VCO.
Just as we have seen opteoelectric revenues increase from 4% of revenues for the first six months of 1998 to 7% for the same period in 1999, broadband seems certain to have an immediate impact going forward.
By the way, the fine folks at JDS Uniphase (JDSU) are responsible for the majority of the uptick in opteoelectric revenues. As a matter of fact I expect them to be huge purchasers of VARL's units especially in light of the high costs in building a terrestrial network to each persons home. For those of you who do not know what VARL's unit does, it basically takes the optical signal from the cable, hybrid cable, or fiber, and turns the signal to a wireless one and back again, thus avoiding other, more expensive, “last mile” solutions. |
