From Briefing.com
11:05 ET ******
AVID TECHNOLOGY INC (AVID) 18 7/8 +3 7/8. Stock has raced out the gate after the developer of digital audio and video
tools obliterated analysts' estimates. Avid's 1st qtr net income rose to $1.8 million, or $0.08 a share, a full 16
cents above analysts' loss estimates of $0.08 a share and much improved from the company's year-ago loss of $22.8
million, or $0.08 a share. Avid's 1st qtr 1996 loss included a one-time, pre-tax charges of $20.2 million. Obviously, the
company's 17.6% year-over-year increase in revenues to $92 million was not significant enough to account for the
impressive increase in earnings. In fact, the company was able to overcome an 18.7% sequential decline in sales to improve
earnings as a result of improved manufacturing efficiencies, a more favorable mix of products, and a tighter
rein over operating expenses. Avid also saw significant improvements in its balance sheet, including lowering its net
accounts receivable balance by $16.4 million, improving inventory turns to 9.3 times, and improving days sales outstanding
(DOS) to 58 days. For those who don't remember, these shares came to prominence in late-March when the company announced
Intel Corp. (INTC) would buy a 6.75% share of the company for $14.75 million, which helped the stock soar 33%
from $9.50 a share to an intraday high of $12.625. Under terms of the arrangement, Avid will develop video and audio editing
products for desktop computers using Intel chips. After latest impressive earnings report, expect Piper Jaffray to boost
its numbers from its FY97 forecast of $0.20 a share and its FY98 view of $0.60-$0.85 and possibly to reiterate its
"buy" recommendation issued April 16. Prudential Securities will also raise its views and possibly reiterate its "buy" rating
issued on March 25, the day of the Intel announcement. **UPDATE** Piper Jaffray boosts its FY97 forecast from $0.20 to
$0.57 a share; has 12-month target of $20 a share. |
