Any info about Iomega (IOM)? Message Board

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Non-Tech : Any info about Iomega (IOM)?

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To: Tom Carroll who wrote (4274)	7/14/1996 4:28:00 PM
From: Rodney B. Hill	of 58324

Tom, I realize you are intentionally trying to be conservative here, but last quarter enexpected Jaz ramp-up costs were 7M (or about 5.2M after taxes). So I think yes, they will maintain net margins. I think a more realistic figure is 6.9%. So, following your example: Revs = (0.1*129)/0.069 = 187M to make 10 cents and meet estimates. If revenues are simply flat in Q2, eps = 11.9 cents. I don't know what revenues will be, but I'm quite sure they will be significantly better than flat (quarter-to-quarter). On the down side, no one really knows if any similar unexpected costs will appear this quarter. Additionally (as a few people have previously pointed out), I don't know if Iomega really wants to have a blow-out quarter so they may artificially hold eps to a reasonable (probably a little above estimates) level. It will make a reasonable Q3 easier to make. You have to keep in mind that Q3 should have the first substantial OEM drives that will have significantly lower margins. I think Iomega will want to still have Q-to-Q eps growth, and this could be more difficult with a blow-out this quarter. Rod

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