Todd Ruff's post - beginning with a quote from Rocky Reid:
<<BLINDNESS to declining Iomega revenues>>
Because you keep bringing this up - lets look at HISTORICAL REVENUES and
other numbers for Iomega -
Quarter Ending: Revenue/Net Income(millions)/Net Profit Margin
12/31/95 = $148.8/ 9.9/6.7%
03/31/96 = $222.0/10.1/4.6%
06/30/96 = $283.6/14.1/5.0%
09/29/96 = $310.1/12.8/4.1%
12/31/96 = $397.1/20.4/5.1%
03/30/97 = $361.3/23.0/6.4%
Okay so lets look at these declining revenues. Q4/95 to Q4/96 we saw a decline
of, okay fine an increase of $248.3 million.
Well, Rocky must be right, there should be a decline from Q1/96 to Q1/97. Okay
lets see, nope there was an increase of $139.3 million.
Fine then, net profit is declining - oops that shows a continuous increase. And, oh
my heck (i am in Utah), profit margins are continually increasing.
Rocky, distorting history still doesn't help any of your ridiculous declining revenue
statements. The only thing that I can tell that is declining is your cash, or I like to
look at it as your losses are increasing.
BTW, Do you know when PC Expo starts? You may want to get down to The
Javitz center and see for yourself how much Iomega is "declining".
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The above post began with a snip from Rocky's post:
<<BLINDNESS to declining Iomega revenues>>
and later accused Rocky of "distorting history."
Rocky's post (24641) was specific about the revenues that declined as follows:
<< Don't tell them revenues are declining even though 1st Q's
revenues were down from 4th Q, and relatively flat from 3rd Q.>>
Rocky's first statement was true. His second appears to redefine the word "relatively."
The above post provided the complete revenue data and then put Rocky's statement in perspective.
Did Rocky "distort history" any more than the above post distorted Rocky's post by omiting the portion of it that was most relevant?
Rocky could have been asked whether he can provide any reason for Q2 97 revenues to be less Q1 97 revenues or, at least, less than "analysts' projections of Q2 97 revenues?"
In an earlier post Rocky remarked that delivery of Zip drives to retail stores continues to be constrained - apparently to deliver increasing product to OEM's. The only response to that remark was in a subsequent post in which it was noted that more Zip drives in boxes is a good thing; which, again, put Rocky's remark in perspective.
However, Rocky could have elaborated with the following questions which bear on expected 2nd quarter revenues and net profit:
How much profit does Iomega give up on each Zip drive that is sold to OEM's instead of to retail?
How many more Zip drives have been sold to OEM's in Q2 versus Q1?
What is the average number of Zip disks sold to a person who buys a Zip drive at retail compared to the average number of Zip disks sold to a person who buys a box with a Zip drive - during the month or two after his drive purchase?
And so forth!
If you supply your own answers to these questions and do some basic math you will have your own estimate of any possible affect on IOM's Q2 earnings per share.
And, of course, the above remarks should also be put in perspective - which, no doubt, a subsequent post will do.
HRP |
