I copied and pasted this message from Cybervster on the MF Iomega board.
Last quarter CyberVster uncannily predicted (based on his sources) eps and
revs before the anouncement, including the 30 million European warehouse debacle.
Below is his outlook for 3q eps and revs:
>>>Subj: My Homework Results
Date: 96-10-05 18:03:09 EDT
From: CyberVster
Fellow Fools,
Well, I'm Back. Lurking for the last weeks as I try to catch up on the summers events. I spent the last 2 months in Australia (traveled the Queensland coast from Sidney to Cairns) Baking in the sun and diving the Great Barrier Reef. (Highly recommended.)
So here's what I've learned about Iomega. July was challenging, as was the first weeks of August but August ended up sharply and September was better then even the CEO could have believed. The folks in Roy are walking around with a spring in their step that was noticeably absent early in the quarter.
Seems that world wide there is only one soft spot, southern California (Any Fools from that part of the country want to try and confirm that?) It is suspected that the $99 Epson Zip going to $129 in that market is the main reason for the softness.
Europe has picked up nicely, and I can personally confirm that the Asian market is strong and Iomega even has a nice presence in Australia (every printing service bureau I checked would except copy on a Zip disk. Every computer store knew what they were and commented "no worries" [meaning they sell well].)
My impression is that the 2 big analysts were mostly lucky last quarter, and are not really doing their homework on this company, but lowering the bar won't hurt. Neither invested any real effort in discovering how the quarter was panning out for Iomega.
Epson is a contract manufacturer (read not a Licensee) of Zip and is counted in the 3 Million Zips shipped that was recently announced. Tie ratios are holding fairly well although I could not get any numbers for them. And I suspect no one else can either.
It seems to me that two very important developments over the summer are not getting the attention they are due. First, The BIOS announcement, Second, the Zip on a chip by Intel. We all want to see Zip replace the floppy, well these two developments go further then anything else to secure that goal. I expect that as this information sinks into the OEM's and others plans - press releases will be issued.
Inventory, Finished Goods, were just over $30 million coming into Q3 because of the Europe diabolical, Expect them to remain high this time around also as Iomega will be stockpiling for an unprecedented Q4.
As for the stock, IOMG is getting very hard to borrow again. There are a lot of shares that will need to be bought in a short period of time. Thanks to folks like M Berman and others, I suggest you fasten your seat belts going into numbers and hold on for an elevator ride of memorable speed.
I expect Iomega will obtain its goal of a $99 retail zip during the first quarter '97 after the Intel Zip chip is designed into the drive. This chip will bring Iomega's cost to about $50 per drive.
All you computer types keep your eyes peeled for that Zip enabled BIOS and new zip drives sporting the Intel chip. These developments will signal the next big wave of market share as well as the expected $50 price cut we are awaiting.
Jaz Drives? They are not just icing on the cake anymore. Look for some nice increases in the numbers coming to a BBS near you in just 2 weeks.
Bottom line, and I reserve the right to update this in the coming weeks, At worst Iomega should report sequentially flat revenue and EPS.
Feed back, Flames, other thoughts and comments are welcome.
Mark
PS: MF Ben, you have my ear.
PSS: Folks with an agenda need not reply<<<
FWIW
Barb
I too se[ns]e: The Plan Coming Together.
|
