Young, The following statement taken from Iomega's recent press release caught my attention:
ROY, Utah--(BUSINESS WIRE)--Sept. 19, 1996--Iomega Corporation (NASDAQ:IOMG)
..."There are currently more than 2 million Zip drive owners around the world, and many of the world's top personal computer manufacturers now build Zip drives into their computers as either standard or optional features," said Timothy L. Hill, vice president of worldwide marketing for Iomega....
Back on June 3 there was another press release:
ROY, Utah, June 3 /PRNewswire/ -- Iomega Corporation (Nasdaq:IOMG)
...To date, approximately 2 million Zip drives have been sold since the product's introduction in March 1995....
One could assume by comparing these two statements that Iomega has shipped something less than 1 million ZIPS during the last 4 months. If we also assume that they are very close to the 3 million sold number, (over 2.9 million), we could then approximate ZIP units sold this quarter to be around 700,000.
This is not a good.
Even if we were to use a number like $215. to represent each ZIP (w/disks) sold, we're only looking at $150 million in ZIP (w/disks) sales this quarter. This would represent quite a slowdown.
Also, last quarter's net income was $14.1 million. Just to be conservative, let's add in the $4 million for rebate and call it $18.1 million. If only slightly more than half of the 700,000 ZIPs sold this quarter have to be accounted for with the $50. rebate, then we would wipe out all of the $18.1 million in profit. Where are we going to make even the $0.06 or $0.07 a share that JPM and H&Q are estimating?
Am I way off base here? Any comments?
Regards - Dale |
