Jason: highlights from Lehman on SMRA
(note $94 mil is $2/share)
We are now looking for
gross profit of $94.6 million in 2001, growth of 31.8%, revenues of
$270.3 million, growth of 36.2%, and EPS of $0.63, growth of
30.2%. These forecasts compare to our previous assumptions for
gross profits of $80.5 million, revenues of $230.0 million, and
EPS of $0.56. We are encouraged by these higher revenue, gross
margin, and EPS forecasts and would not be surprised to see
these estimates exceeded in the future, leading to further upward
revisions to our model.
Gross margins, another key metric for Somera, finished at 36.5%.
Deinstalled equipment carried a 51% average gross margin in
the June quarter, while new equipment sales recorded 21% gross
margins. These figures compare to 53% and 22%, respectively,
in the first quarter. The June quarter gross margins were slightly
above management's long-term goal, and reflected sales of high
margin items such as Lucent 5ESS switch modules, Tellabs digital
cross-connect systems, and Ericsson cellular equipment, which
Somera intentionally chose to speculate and purchase into inventory.
One of Somera's current targeted
opportunities is international business. The company recently
announced the hiring of a director of international sales on June
15, which should help to solidify and lead its international
strategy. We believe Somera intends to focus on European
markets and intensify its Latin America efforts in the near term.
RBOCs still represent well under 10% of Somera's revenues and
given that the addressable market from these customers is
extremely large, we believe management is working diligently to
break into these accounts. |
