Re: Earnings
The earnings estimate for Iomega's 4th qtr is 0.31 a share. That is
41 % growth quarter to quarter over the 3rd qtr 0.22.
How many other companies are growing at this pace ? If anyone can
find some, then we should all be invested in those as well.
Iomega does not have the Asian exposure to sales that has been
keeping the markets reeling this week. 8.5 % of sales from Asia.
Yet most of their production comes from Asia where it is becoming
cheaper everyday to manufacture goods. Does anyone have thoughts on
how much this adds up to ? If I recall correctly, hasn't the
malaysian ringgit declined by over 50 % ?
Iomega needs to earn about 42.5 million to make earnings this qtr.
(137 million shares x 0.31). If net profit margin stayed the same
at 7 %, they would need about $ 607 million in revenue. Certainly
possible with a great quarter. However, when you add up the
following : Decreased production costs from economies of scale,
devaluation of the ringgit, and the tax advantage of production in
malaysia, an increased net margin should be in order. Couple this
with Christmas sales, no more supply constraints, increased product
line and minimal exposure to sales in Asia, then earnings this
quarter start looking very nice.
So, if the market wants to throw out all tech stocks because of
Asian turmoil, well that's fine. I guess when Iomega reports
record earnings in January with a 41 % increase quarter to quarter,
they should shine well on the street.
Regards,
Dave |
