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Technology Stocks : Information Architects (IARC): E-Commerce & EIP

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To: tech who wrote (3247)11/14/1997 3:45:00 PM
From: feltburner  Read Replies (1) of 10786
 
A little math, Part 2:

Assume operating expenses increase slightly in 4Q from 3Q's approx. $4.4mm to $5mm. This gives full yr. expenses of $12.6mm. If ALYD achieves $8mm in revs. in 4Q, they have $12.6mm revs for the 12 mths. and break even for the yr.

You can assume much higher oper. expenses in 4Q if you wish, but if you're trying to argue that ALYD's statement of break-even results at the high end of a 10-15mm rev. range is a lie, you would have to bump operating expenses to $7.5mm for the 4th qtr.

The fault in your math is that you can't use eps and assume they have to earn 51 cents in the 4th qtr because of the increase in number of shs. throughout the yr. (a $2mm loss on 12mm shs. is a loss of 17 cents/shr, while a $2mm gain on 17mm shs is a 12 cent/shr profit).

-Felt Burner
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