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Non-Tech : Monterey Pasta (PSTA) return to profitability ?
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To: Feraldo who wrote (98)6/27/2001 2:17:59 AM
From: Jeff Bond   of 114
 
>> guess the earnings growth will take a hit this year, as far as the bottom line. Taxes are finally catching up to them. <<

not necesarily ...

from recent company press release announcing quarterly results:

"The 2001 net income number reflects full taxation for book purposes (approximately 39%), while the 2000 net income number includes only nominal taxation (approximately 6%). The Company's cash tax liability for 2001 is expected to be less than 10% of net income because of deferred tax assets, principally related to the expected benefit from utilization of net operating loss carryforwards."

that means psta was able to realize earnings growth DESPITE a tax rate of 39% vs. 6% in the prior year. thats pretty good, especially in considering pasta sales are normally not plotted on parabolic curves :o)

also, psta gets to write off old losses going forward, which means the numbers will be even better than normal.

this all adds up to one thing ... massive year over year earnings growth rates ... which translates into one thing ... persistent buying pressure ... which will assuredly lead to one thing ... stock price appreciation :o)

eat your ramen boy, but buy some psta, and soon you might just be able to buy a piece of meat, good luck in school.

regards, jb
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