John, I too was impressed with the way the stock was running up before earnings, especialy since Morgan Stanley, (the investment banker who
brought REDB public), was consistently showing up as the highest
bidder on the NASD as the stock was trading. Apparently, the conference call was not too positive about the future. Although I did
not listen to the call, I did have the opportunity to read some of the
comments, which I will summarize:
Positive:
-Earnings & Revenues for the Q were above analysts consensus
(WorldCom was mainly the reason, @ $2.4MM)
-Operating margin returned to the black (6%)
-Added 23 new customers (big names, such as WorldCom, Boeing, NEC North America, BellSouth, Jiffy Lube, TCI, etc...)
-Some key wins over ORCL
-Management changes
-Recent announcement that HP will resell Red Brick data warehouse
products and services through HP's America Local Products
Organization. (helps expand REDB's market reach)
-Encouraged by recent feedback from the channel
-REDB 5.1 has reached its final stages of beta testing and should be
scheduled to ship by mid February.
Negative:
*No CEO at meeting! -per Paine Webber: "More troubling was the fact
that the CEO was unreachable following the call and that the new CFO
(hired 12/3 had little to offer to explain in the sudden negative
outlook for the company"
-The company remains in a period of transition - shifting its
focus to a solutions based sales model and a broader product line.
-Tough market. Customers have a high cost of entry into the data
warehousing area.
-Continued sales & marketing investment
IMHO, something doesn't add up, and investors hate uncertainty.
REDB has been rumored for some time as a buyout target. They have the
best data warehousing product in the market, and they are a pure play.
Did anyone on this thread hear the conference call?
JL |
