SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Technology Stocks : All About Sun Microsystems
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: cheryl williamson who wrote (3694)8/25/1997 5:19:00 PM
From: jeff armstrong   of 64865
 
First you make assumptions, which can be dangerous.

The qtrly financial reports in the SUNW web site have a line under assets listed as "Accounts Receivable, Net" which is defined as "Money owed to a company for merchandise or services bought on credit." The assumption is that you can show a correlation to the revenue for the following qtr. Based on available data (some information was missing), I found 14 data pairs with a ratio range of 53% to 70% (mean=60%) to the following qtr. More interestingly, if you divide 4th qtr accounts receivable by the following 1st qtr revenue (4 data pairs) you have a range from 65% to 70% (mean=67%). In other words, 4th qtr FY97 accounts receivable ($1,666M) divided by 67% would predict about $2,490M in 1st qtr 98 revenue.

The next step (somewhat subjective) is to multiply the revenue by the anticipated profit margin. FY97 profit margin showed an improvement to 8.9% from 6.7% in FY96 due to a more profitable product mix. If you feel comfortable with 8% you can estimate 1st qtr FY98 earnings at 2490 X 0.08 and get $199.2M or about $0.51/share (based on 389M shares0.

You can fiddle with these numbers to make them say whatever you want. Irregardless, with their order backlog and momentum going forward, I see continued revenue and earnings growth plus a bright future for SUNW.

I personally think there could be a strong surprise to the upside this qtr. What do you think?
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News