ANTC. . .
The rumor spread by CIBC was that ANTC was showing a decrease in margins from last quarter.
That is a white lie. While it was "technically true" it was extremely misleading.
It is true their margins fell from 22.4% to 21.1%. . that is a decrease of a little over 5 percent.
HOWEVER, earnings increased by 116% over third quarter 1998.
HOWEVER, sales were up 58 percent over last year . . .[ever hear of making it up in volume?]
HOWEVER, they met analyst expectations on earnings.
[from financial report]
However, operating margins (excluding goodwill amortization) increased to a record level of 9.1% continuing three quarters of sequential improvement in this key measurement in 1999.
HOWEVER. . .
The gross margin percentage for the quarter partly reflects product mix changes, particularly reflecting the dramatic growth in sales through the company's distribution of the Arris (the ANTEC/Nortel Networks (NYSE: NT - news) joint venture) Cornerstone products.
HOWEVER. . .
Also contributing to the lower margin percentage during the quarter were lower manufacturing margins caused by temporary supply shortages, primarily in metal castings, which impeded production and delivery of certain manufactured products and caused additional unabsorbed overhead expense. These parts shortages are expected to be resolved during the fourth quarter.
Other factors that bear on ANTC valuation are as follows:
A.T.&T. was their primary buyer of goods. . .but they needed to diversify, to keep sound. . . ''Equally important,'' continued Stanzione, ''is that while sales during the quarter to AT&T BIS of $105 million increased 153% as compared to the third quarter of 1998, our domestic sales to non-AT&T BIS customers increased over 33% as compared to the same quarter in 1998.''
. . the Company indicated that it would unveil several new products at the upcoming Western Cable Show in Los Angeles in December.
Also, the Company disclosed that in the fourth quarter AT&T BIS will conduct laboratory trials of the Arris Cornerstone internet protocol (IP) telephony solution.
The Company's new network powering product, TSP (Total System Power), is positioned to benefit from demand for system reliability in cable telephony systems. Shipments of the TSP product, which have already begun, are anticipated to accelerate throughout 2000.
Order input for the third quarter reached a new high of $239 million, up 75% over the same period last year, and the Company ended the quarter with a backlog of $102 million, up 100% from the third quarter last year. Backlog continues to build even as sales have reached all time highs for each of the past two quarters.
Bottom line. . .is that nothing has changed that would lead us to believe that ANTC is of LESS value than it was yesterday. . . and certainly not 25% less value.
So it is this writers opinion that CIBC is either INCORRECT in their valuation. . .or that they are 'playing' ANTC against their own customers, after taking huge short positions, and telling customers to dump shares. . . .the activity is indicitive of brokerage buying into the shareholder selling.
And this is why I keep asking for access to brokerage positions 3 days before, the day of and 3 days after each and every upgrade or downgrade!!
Keep those cards and letters coming to the SEC. . . we really are making a difference.
Rande Is |
