Ok, this should cover most of the main points of the conference call. Anyone else who heard it feel free to clarify or amend this summary...
The first of many questions asked Mr. Trablesi was the offset expected by the acquisition of RDL. Mr. Trablesi basically stated that this acquisition is going to bring more profit on both a short-term and long-term basis, and that it will positively offset what he characterized as a "small setback," referring to the slowdown in Asia particularly by the fourth-quarter. The most interesting comment that was made was that overall earnings for 98 "will be as expected" referring to current annual EPS estimates.
A question was asked about growth prospects in Europe, and he said there was "much activity" and "proposals," and I got the impression that they had several deals pending, although he did not specifically indicate that. He specifically mentioned their recent alliance with ? I forget the name of that German firm, as a driver.
He also mentioned that growth in the U.S. was "on target" based on growth in Government defense programs.
He went on at great length about the recent acquisition of RDL, emphasizing that the specific capability for wireless which RDL brings will increase Orbit's revenue from this market far more than expected.
The acquisition also gives Orbit an entry into the cable TV market.
Despite this comment, someone asked if Orbit intends to sell off that segment of RDL's business. Trablesi emphatically stated that the non-wireless (cable) market is "an important part" of the company's business plan.
Some specific questions were asked about Asia, having to do with where the weakness was and in what business areas. The business areas affected were in wireless and satellite, but he characterized those weaknesses as "delays only" [maybe THAT is the most important comment!] emphasizing that the needs still exist for those orders and that he still expected those sales to come to Orbit starting by the third quarter of 98. As for the locations of weakness, Korea was the weakest market, to a lesser degree Japan and China.
He was asked about the automotive segment of their business, which he characterized as slower than expected. Does anyone know what percentage of revenues this segment is?
That is more or less the major points of the question and answer period.
Based on what I heard, the market has definitely overreacted! But we may tread water going into earnings, which are due out on the 25th after the close. There will then be another conference call.
Hope this helps to put people at ease given today's carnage. Maybe it's time to ante up again...this stock looks awfully cheap given the short term nature of this news..
regards to those battered and bruised out there,
Louis |
