Jeffrey, while I agree with your optimism regarding Acuson, there
are a couple of things you said that didn't agree with my
impressions. Could you please elaborate?
Jeffrey Greenberg (article 25) wrote:
>Acuson has shown 4 qtrs of record earnings in a row...
Really? According to a chart from Baseline Financial Services shown
on e-trade, three quarters ago was their second worst quarterly
earnings figure for nearly a decade. The chart suggest that the 4
quarters of 1992 had a total EPS 1.08, vs the previous 4 quarters EPS
of 0.34. This total is worse than 1993 (.40) and 1994 (.62).
Earnings per share:
Date 1992 1996 1997
----------------------------
Mar .35 .19
Jun .31 .19
Sep .22 .06
Dec .20 -.10
Is my stock broker's chart wrong or am I reading them wrong?
The charts look like they suggest record revenue, however.
Perhaps this is what you meant?
>the ultrasound market has grown for the first time in 5 years.
>If you look at the 5 year history of acuson, it's decline mirrored
>the commodification of ultrasound machines... that is no significant
>technological advance occured,
Here, I'm more optimistic. I believe Acuson has continuously
made significant advances for each of the past 13 years. New
transducer technology, improved filters, greater ranges of
frequencies, curved transducers, etc occurred almost every year,
increasing resolution, sensitivity, signal-to-noise and ease-of-use.
In the early 1990's some college textbooks still jokingly compared
ultrasound images to weather satellite images. Competitors made
advances as well; I believe ATL and GE both produced new digital
systems during this time period. And the Acuson XP was continually
upgraded to be completive with those systems.
>so everyone competed on price pressure... acuson did not very well
>here...
We agree the stock price didn't do well, but I must disagree if you
were implying something about the whole company. Development of the
Sequoia system was an expensive investment, and in my opinion the
company did an absolutely superb job at continuing to have
profitable quarters every quarter up until the Sequoia release in 96.
_
High-performance ultrasound medical imaging is a very interesting
market. Compared to many high tech companies, the product
life-cycles are extremely long, cost to develop a new platform is
extremely high, and there seem to be only a handful of strong
competitors in the high-end ultrasound market.
Because of these factors, it is my opinion that the stock of the
leaders in this market may perform well for an extended period of
time. Also for those reasons, I believe that the competitor's
products may have nearly as much influence on ACN's stock price as
their own.
Acuson was, in my opinion, a leader in the late 80s and early 90s.
During this period the stock performed extremely well.
Note that the earnings dip Acuson had in 1996 looks very similar to
ATLI's few quarters of negative earnings in 1993-1994. I'm wildly
speculating that this corresponds to their investment in the
development of their HDI-3000 system. After that time their stock
performed very well even though the market was pretty flat. With
the HDI3000 out, and Acuson spending money developing Sequoia in the
mid 90's, ATLI(the stock) outperformed ACN (the stock).
I believe Sequoia and Aspen once again gave Acuson a significant
lead over their competition. After the unprofitable quarters of
bringing out the new system, Acuson's stock started performing
extremely well again.
This is why I asked the question about the ATL HDI-5000. Some
analysts are predicting negative earnings for ATLI next quarter
followed by very large positive earnings for the following quarter.
If this follows the pattern I believe I see above, does this
indicate confidence from the analysts regarding their new system?
Larry's article (#21) [Thanks for the feedback.] raised an important
point: if ATI systems cost $75-100k less than Acuson systems and
meet his friend's needs, I like to understand what advantages the
Acuson systems have to make them worth more than other systems for
other customers. I don't doubt that Acuson systems have such
advantages, but I like to understand them if I'm holding as
much stock as I am.
Could anyone who's seen the HDI5000 system explain how or if it
compares to Sequoia or Aspen?
Long term, however, Acuson has a number of brilliant people, and I
am confidant in their success as a company and a long-term stock.
Ron
Disclaimer: A large percentage of my savings is in Acuson stock. |
