The cautionary statements at the end of the press release are identical to those in the previous 2 earnings reports.
I'm not impressed with the Q2 results, although the negative surprise is 170%, an improvement from last quarter's surprise of -260%. (It's pathetic that we've stooped to this level of measuring NM's improvement). The stock dropped 25% last time, but the stock had recently been over $7, unlike this time. We also have support at ~$4.50, so I'd assume the downside will be less than last time.
On the other hand, sales declined about 20% sequentially, even though Q2 is typically much weaker than the relatively strong Q3. However, the operating margins actually improved in Q2, compared to Q1.
Veratti cited weak international competition and the Asian situation as problems, but the international revenue was only 4% lower sequentially. That's not bad, but the decline of 41% in N. American sales is bad.
The company's liquidity problems have been solved, at least temporarily, so that's no longer an immediate concern. However, the added shares will ultimately dilute any profit NM may earn.
Management signed some important agreements during the quarter. But while Veratti is "enthused" about possibilities of a strategic deal, it still hasn't happened yet.
I haven't decided what I'm going to do tomorrow.
Todd |
