Janice, Archie: As I said in my initial post reacting to the earnings announcement, I was somewhat disappointed, but wanted to hear more details from the report. And certainly, 28% growth quarter to quarter is nothing to sneeze at. So I did not consider the news to be bad, I only figured that the stock would not rally in reaction.
Having now heard some more details, I am feeling better.
In particular, the news that 4 million is being held in reserve for rebates for next quarter is quite good. I saw someone saying this equated to only 57,000 Zip drives and 57,000 gigapacks, but that math looks faulty to me. (I haven't read all the comments on this thread yet, so someone may have already taken issue with this.) Moreover, a tie ratio of 10 gigapacks per drive is surely too high.
The 4 million could have gone straight to the bottom line to improve the numbers for this quarter. But KE and his people decided to take the more conservative approach, looking more at the big picture than at just one quarter's results. I heartily approve of that decision. I continue to see this management team making the right moves. I expect continued robust growth from this company. Third quarter numbers should be good, and fourth quarter could be spectacular.
- Allen Murdock |
