Fortunately, AUDC's earnings report doesn't contain any big surprises of the type that AUDC's share prices seem to have been discounting the past few weeks. And there were indeed some good things in the report.
So, I would expect a relief rally with the way stocks have been bouncing after even disastrous earnings reports, plus there is a definite tailwind in the market tomorrow with Nasdaq futures currently higher on IBM's respectable earnings report.
1) Larry, on the YAHOO AUDC board was astute to note that AUDC REVENUES INCREASED 6.6% quarter over quarter.
2) Then, one might ask, "Why the lesser EARNINGS when REVENUES INCREASED?" Upon further investigation, we see that RESEARCH & DEVELOPMENT almost DOUBLED since the December quarter!!!
Any market sage would be able to flag the doubling of R&D as a sign of confidence and perhaps as an indicator that they've been putting together new products.
And also a decent increase in Sales & Mktg expense to boot. Are they preparing a sales offensive of some sort?
Revenues $12,720 $13,554
Cost of Revenues 4,931 5,576
Research and Development 1,853 3,493
Sales and marketing 1,949 3,364
3) It does appear that AUDC had bought back 494,000 shares as of March 30. This can be deduced from the lower shares outstanding of 42,436,000 shares as of March 31 as compared to 42,930,000 shares as of Dec 31, 2000.
Note that AUDC shares have plummeted signifcantly since March 30 when it closed at $8 7/8, so it is possible that since the end of last qtr, AUDC bought back MORE shares at prices as low as $6 subsequent to April 5th when Prudential launched its Sell-rating "attack" on AUDC.
Larry, you seemed disappointed that more of the 2M allottment of buyback shares were not bought back, but I had re-listened to the March 14th conf call in which they said they hadn't even started the buyback as of that time, probably because subsequent to their Jan 10th buyback announcement, AUDC shares skyrocketed. The fact that SINCE March 14th, they have probably commenced the buyback (and most likely bought more in April) is a good sign that AUDC thinks their shares at these prices are a bargain and should be regarded with more weight than their comments about visibility, IMO.
My take is that they realized they missed their buyback opportunity in January and if our assumption that they bought back 494,000 shares is true, they did so IN THE TWO WEEKS from their March 14 earnings warning until March 30th. And they've probably been mopping up shares during the first weeks of April, too.
They're investing in their company because they believe in its forward prospects, in spite of current economic conditions, otherwise, they wouldn't buy back shares!
In summary, the AUDC report is nothing like the recent CSCO warning in which they stated earnings would be LESS THAN HALF the consensus estimates! Having already been beaten down, CSCO merely dropped from $17 to $16 on that news.
Certainly AUDC will fare even better because their earnings report was a respectable one with no surprises, and even a few nuggets. |
