WDC/Sandisk Corporation Message Board

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Technology Stocks : WDC/Sandisk Corporation

WDC 157.75

+0.4%

Nov 14 9:30 AM EST

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To: Michael C. Woodward who wrote (1990)	12/7/1997 1:29:00 PM
From: Bobby	Read Replies (1) of 60323

Entry into retail sales may impact short term earnings - Anytime a company enters into retail sales it has to set aside a substantial (?) sum for product warranties. This liability account will affect net income in this quarter if retail sales numbers are not accounted for in this quarter. Once retail sales increase, the product warranties account can be matched against the revenue account. Its only my hypothesis(although its based on accounting principles that I am aware of) so please feel free to shoot holes. Ofcourse it doesn't change the fact that long term prospects are great. I only put forward the hypothesis to support Mr. Harari's cautionary comments - he must have known the above. Bobby

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