Pushing 40% gain from RJ's call last week. What was that??
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Symbol 3rd-qtr profit up, may restate results
Thursday October 17, 5:23 pm ET
HOLTSVILLE, N.Y., Oct 17 (Reuters) - Symbol Technologies Inc. (NYSE:SBL - News), a maker of bar-code scanners and other mobile data terminals, on Thursday posted a third-quarter profit, reversing a year-earlier loss, and said accounting issues may force it to restate previous results.
Symbol reported net income of $13.1 million, or 6 cents a share, in line with analysts' estimates, as polled by research firm Thomson First Call. That compared with a net loss of $35.7 million, or 16 cents a share, in the year-ago quarter.
Excluding a charge related to the hiring of its president and chief operating officer, Symbol posted net earnings of $15.6 million, or 7 cents a share, compared with $12.6 million, or 6 cents in the same period a year ago.
The Holtsville, New York-based company's revenue increased to $339.5 million from $331.2 million a year ago.
In August, Symbol said the U.S. Securities and Exchange Commission was probing the timing and amount of revenue it recognized in 2000 and 2001.
Symbol also said the U.S. Attorney's Office for the Eastern District of New York had launched a related investigation, but it was not currently targeted.
The company said it "may well have to restate" its revenue and income during 2000, 2001 and 2002, but said it has not determined the amounts and time periods for any potential restatement.
Symbol said it expects that the potential restatement would likely lead to a net reduction of previously reported net income and revenue in 2000 and a net increase in income and revenue in 2001 and 2002. It said a restatement would "not have a material impact" on its balance sheets as of the end of last month.
Symbol said it believed revenue to be reversed or reversed and restated in later fiscal years due to a restatement would total "less than 10 percent" of revenue originally reported for the years 2000 and 2001.
"We are confident in Symbol's fundamentals and have already made numerous changes in operating procedures and systems to address the issues that have come to light in the review process," Chief Executive Richard Bravman said in a statement.
Shares of the company gained 40 cents, or 6.4 percent, to close at $6.70 Thursday on the New York Stock Exchange trade.
biz.yahoo.com
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From the conference call:
1.] 7 1/2% sequential growth Q2 to Q3, off a low base, but in a tough operating environment. Macro environment provides poor visibility, but linearity praised by one analyst. 5-10% would be at the high end of the range in good times, and they can't anticipate that we're entering good times. Good opportunities for improvement both top and bottom line (revs and cost cutting).
2.] Analyst's question about high operating profits in the service area seeming to account for nearly all of the company's bottom line profits... i.e. 35% operating margins for the $73 million reported for services accounts for all the quarter's profits. So the manufacturing of products was operating nearly at breakeven. Response was unclear, except that blended services margins were really 28%, not 35%. But the analyst's objections seemed valid. Compare minutes 43:15-44:50 to 1:04:52... of the conference call. Suggestion of further discussion with the analyst "tomorrow" about the gross margin and operating margin models between services and product.
3.] From Chris Quilty of Raymond James, [Q]: any differences between Mobius and Proxim's not very successful "Harmony" product? [A]: Yes. Basic architecture and costs of ownership.
[Q]: Direct competition with Cisco in their core enterprise markets. How do you get leverage? [A]: Symbol is perfectly positioned in our existing core markets (retail, manufacturing, transportation logistics, health care) where the opportunity is obvious and the application is in demand; "'working on strategies' outside our core vertical markets. We have a significant technological lead with this next generation WLAN product....From a channel and distribution point of view, we need to work through our strategy of how we take this product outside our core markets into the general enterprise."
(Mobius begins shipping in the next few weeks.)
4] less sexy growth opportunities: baggage tracking/security; retail ("portable personal shopping systems....point of decision information systems"...."Food and non-food shopping arena potential paradigm shift" in pilot stage, consumer acceptance unknown. |
