Your interpretation of my two comments, first about WIND should be hard pressed to make less than 13 cents EPS this quarter, and then that anything greater than 9 cents is entirely up to management, is correct. My predictions call for at least 13 cents, but management has made it as clear that they have eliminated the hockey stick that causes volatility in sales and profits - and internal operations. This means management will bring in EPS at or above 9 cents, depending on how much future flexibility they want to maintain for the July quarter. They now run a non-reported backlog consisting mainly of sales that could be booked in either the current or following quarter.
Mathematically, this means I can't predict quarterly earnings any better than anyone else, other than to say it will be at least 9 cents. However, none of this has any negative implications for my projections for the year as a whole, and certainly not for future years. As a matter of fact, by reducing quarterly volatility, management provides me and all other investors with a less cluttered basis for projecting the future.
Ron Abelmann has been making this assertion publicly for a while now, but every time he says it, it carries more credibility. One reason for this is that his statement comes after yet another successful quarter and/or discussion of the breath of business that is flowing into the company. Another reason it carries more credibility is that the consequent follow-on discussion about mechanics enhances understanding and appreciation by the investment community.
I am totally comfortable talking about anything that happened at the H&Q Conference or any other conference I attend. I make it a point to talk frequently with anyone, in any company, connected with the embedded systems space. WIND management would never relay any insider information to me, nor would I ever ask.
Allen |
