Novell (NOVL) dirt cheap, good buy? Message Board

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Technology Stocks : Novell (NOVL) dirt cheap, good buy?

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To: Wallace Rivers who wrote (18659)	11/25/1997 12:50:00 PM
From: Jim McCormack	of 42771

Wallace - Earnings projections.... I was lucky and called earnings to the penny last Quarter and I learned a lot from Salah and others along the way on how to go about the forecasting. I would like to see a return to a community effort to analyze and project facts not opinions..... Salahs post is the only one so far this week to project earnings. Are we all incapable of the math? Hard to believe we all think we deserve to make money without the understanding of finance isn't it.... Do an earnings projection on your own. You will be a much better investor after performing the research and thought required to make a projection. Or hang on the side as that's cool too... Seriously a little more factual analysis and less "opinion" would be refreshing. We got Brains - Lets use em! Jim Repost: It may not be the story as it happened but my projection for -.35 just happend to come up.....Last Quarter. To: Jim McCormack (14182 ) From: Jim McCormack Jun 27 1997 9:33PM EST Reply #14250 of 15965 Joe: One More time for Revenues in Q3... Now that I know how to do the analysis correctly thanks to Salah - here is another shot at it. See I did learn something here.... Only a couple of differences from Salah's 1. I'm using the BOX number from the Conference Call of 109M 2. I'm Calling for a further 15M in OEM Royalty Declines based on sequential trend. 3. I'm putting the reserve reversal for the 20 million they put up last quarter for the Channel. 4. I'm only giving them 10M for earnings on the cash due to a projected 5M "Put" Settlement obligation Sales (Millions) 32 Education and Other - Likely to be lower. 35 Netware V3 Sales - Likely to be lower. 132 Intranetware and N4 Sales 25 Network Infrastructure Products 14 Network Management Products 26 Groupwise 273 TOTAL NOTE: These are the acutals from Q2. PROBLEM: There are two forces at work here: 1. The company will halt shipments to the channel. Last Q they stuffed 109M according to the conference call. So the "Sell in" force has been stopped. But what percentage of each product sales by category did this represent? For Example: They can't be stuffing 3.X .... Can they? If they are not then the 35M sales which is down from 66M in Q1 can be expected to decline on trend and revenue will decline as a result of lower "Sell through" by resellers. Same with other categories. 2. The "Sell through" problem has not been addressed. I have no data to address the reseller performance - and markets demand for Novell products separate from the Company "Sell in" factor. I suspect that sales for some categories are declining due to market forces - this is the wild card - these declines are not taken into account by this analysis. Of course any sales increases due to market demands are not included either. Expenses 77 Sales Expense 224 Operating Expenses 301 Total Expenses Before Savings -20 Ongoing expense savings trend 281 Total Expenses Revenues 273 Sales -109 Conference Call number for Box Shipments into the channel - Q2 -15 Further OEM Royalty declines 20 Reserve reversal 169 Total Revenues Profit -112 -35 layoff charge 10 Other income (Depressed due to Put Warrant settlements) -137 Profit before taxes Tax 17 Remaining Tax Credit left from Q1 Net Profit -120 Net Profit Earnings -120/348 Shares in Millions -0.34483 Per Share in Q3 W/O Charge - put back the(35) -0.22126

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