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Technology Stocks : All About Sun Microsystems

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To: Holger Johannsen who wrote (6640)	1/10/1998 12:10:00 PM
From: Carmine Cammarosano	Read Replies (1) of 64865

Holger, "all that matters is the bottom line."...wrong, if business is done in local currency, then expenses are also lower...my point is that you have to look at the overall picture...if Sales are translated back to US dollars that does not equal a smaller bottom line(profit), because expenses(afterall business is done in local currency)have to be translated into US dollars and that counter balances the negative effects of a strong US dollar...in addition, there is hedging of the currency and lower component costs for SUNW's products...another way to look at this is if all manufacturing was done in the US and the product was sold in Asia, then I would be worried...in this latter case expenses remain fixed and income shringes from a strong currency...most important is profit margins and %market share...if a company keeps up with R&D, and keeps business expenses under control, market share will be maintained or grow...this will translate into good unit sales and profit margins will not suffer...profits will continue...

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