Bizarre reaction to a great report. Gross margins of 40.6% should be better received than that. Everything looks fine other than next Q's EPS number of 35 to 40 cents.
In the midpoint of next Q's revenues ($125m), if you put gross margins at 38% (they say they will decline fall modestly, from 40.6%), you've gotta ramp expenses 15% sequentially (!!) to get to 37.5 cents EPS.
It another example of how bad their management is at communication. Financial models are just math. The only variable in the model below is expenses, so either they expect gross margins to collapse (they didn't say so), they expect expenses to ramp significantly (they didn't say so) or they are sandbagging EPS (and if so, why?).
Apr Q
$124,435 Revenues (Mid point of guidance)
38% Gross Margins (down 2.6% sequentially)
$47,285 Gross Profit
$22,655 Expenses (up 15% sequentially!!)
$24,630 Op Profit
19.8% Op Margin
$2,135 Int Income (same as last Q)
$26,765 Pre-Tax Income
22% Tax Rate
$20,877 Net Profit
55,486 Share Count
$0.376 Net Profit Per Share |
