>>analysts are looking at calendar year EPS growth projections of 104% for SSTI versus 44% for SNDK...It is entirely possible, however, that the projections for SNDK are understated <<
If analysts are understating earnings projections that would be good for investors, as it would mean that SNDK would be able to surprise to the upside. I checked two sites and both show consensus eps estimates of 22 cents for the next quarter and 87 cents for the year. This is one of those sites:
ultra.zacks.com
One infrequent poster on SI, Cardin Drake, has projected the eps to come in at 29.5 cents. Why should we care what he thinks? Well, on Jan 27 he posted his projections for the previous quarter with amazing accuracy. Here is that post
Message 12703974
Later, on April 20, he compared his January projection against the actual numbers. Take a look:
From: Cardin Drake
Thursday, Apr 20, 2000 11:33 AM ET
Reply # 10535 of 11984
Doing the math for Q2:
Well, just to establish credibility and brag a little, from
my 1/27 (post #8938), my estimate vs. actual:
1/27 est. Actual
Product 98 97.2
License 12 12.1
Total revenue 110 109 .3
GP 41 41.6
Op. Income 18 17.55
EPS .215 .21
Now the fun part, Doing the math for Q2
The quarter is booked and prices are firm. We can expect
Megabyte growth of at least 35%.(Let's hope for 40% again)
That translates to product revenue of around 131.
To be conservative, we will only raise margins 1% to
31%. (probably will be 32-33%, last quarter went from 27 to 30).
Gross profits =40.6 + 12(License&Royalty) = 52.6
guestimate on operating expenses-increase to 25M
Op. Income -- 27.6 M
Interest Income 5.6 M (expect an increase, but we'll leave it flat)
Income before taxes 33.2
Provision for taxes 11.62
After tax income 21.58
***EPS = .295
The good news is that operating expenses are now covered so
additional gross profits from Product Sales growth will all
fall to the bottom line. Margins could hit 40% by Q3-Q4 if
prices remain stable. Translation: Blow-out earnings are
coming in Q3.
The link for the above post is:
Message 12703974
Later that same day Cardin posted his thoughts for the full year:
To: Bhag Karamchandani who started this subject
From: Cardin Drake
Thursday, Apr 20, 2000 3:16 PM ET
Reply # 10550 of 12170
Ausdauer, calendar 2000 Earnings projections:
Thanks for the kind words.
The key to the 2nd half of the year is the growth in
megabytes from quarter to quarter. The growth has been
and will remain constant at about 40% per quarter.
The good news is because the base is getting so much larger,
the effect on the bottom line is magnified, particularly now
that operating expenses are covered.
At a conservative growth rate of 35%, we are looking at
Product revenues in Q3 of 177M and 239M in Q4.
With a conservative gross margin projection of 32%,
Product revenues will contribute 56.6M and 76.4M in gross
profit Q3 & Q4, respectively.
Assuming 12M in license revenue and 5.6M in Interest
per quarter, if you crank the numbers, you come up with
EPS for Q3 of .42 and Q4 of .57 That gives you $1.49 for
calendar 2000.
Look for a wave of analysts revising their numbers upward.
I feel these are the absolute low-end numbers for Q3 & Q4.
If you plug in a more likely 40% growth rate, and margins
in the 35-40% range, it will make a big difference.
WHAT CAN SCREW THIS UP? Not counting China invading Taiwan,
only one thing. In the first half of the year, we have seen
price per megabyte remain flat. It appears very likely that
it will remain relatively flat for the rest of the year. But
if that changes and it begins to fall, it would change these
numbers dramatically.
Message 13472852
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Per Yahoo the next earnings date for SNDK is July 17. Lets see if Cardin can go 2 for 2.
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