<< We could see 18.5 before the earnings report, don't you think? >>
This is going to be an interesting, and important, earnings report. It will show how well they are expanding into the International Markets, and if the US demand is picking up.
In the 1st qtr report, they said that they had implemented steps to improve margins, neccessitated by the lower margins caused by their move into International Markets.
Soooooo, their profit margin probably increased somewhat over the 1st quarter. The profit margin was 12.6%.
International Paging was up 88% compared to the 1st quarter of 1996. International Networking was up 212% and Wireless Interconnect was up 72%.
Earnings estimates for the 2nd quarter are .22 to .23. By the movement in the stock, I think that the street expects GEMS to exceed those numbers. IMHO.
Personally, I'm trying to guess at how well they will do. Conservatively quessing----- If their revenues increase sequencially by about 8% to about $115 million and their profit margin improves to about 13.5% from 12.6%, they should come in with earnings of about $15.5 million, or $.25 per share.
I think that an earnings report like that might support a stock price around $18. Personally, I feel that they are going to do better than that. I'm really hoping for about a 10% sequential growth, or $117 million, or .26 per share. Anything better than that would be great!
Just playing with numbers........ Any comments?
Regards, Bob
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