Only time will tell, but CREAF has *never* been a stronger play
<<Revenues will still be a worry to Wall Street. Note that revenues are at $287 M, compared to $284 M last year. The street will wonder how much more margins can be squeezed. They'll want to see revenue growth as well.>>
It's a given that the Street wants to see revenue growth, but I think the better analysts will read the numbers from my perspective.
When I look at last year's 1st Q, it was only the beginning of the turnaround - a time when they had flooded the channel with CD-Roms and they were taking in the revenue, but not making the profits.
The street is going to evaluate the guidance for 2Q numbers, which my man Craig McHugh said we could expect to be 10-15% better than last year (which if you remember resulted in a huge $.64 earnings number). And he practically said that those numbers did not include an upside surprise from the Encore revenues, which he mentioned they had received some great initial feed back on.
But the real number that I think the Institutions are going to looove between now and February is the diversification. I remember the 2Q conf call from last year when Sim said that the profits were 90+% from audio.
During the call, they said their profits for this past Q broke down as only 55% audio, 35% multimedia and 10% other. This is HUGE! Wake the kids, call the neighbors, b/c this is what we wanted to hear.
I am not going to repeat all the great news they shared during the call - anyone who is serious enough should listen to the replay - someone posted the replay # earlier today.
But, mark my words, by February, we will remember tonight as the night that Creative arrived to the Big Show.
Beat the estimate by roughly 20%, outstanding follow up conf call with a teaser for COMDEX, in short, I have reservations for the 40th street express arriving by February 1998. |
