<< revenue is sales or ... services for which payment has been received.>>
Well, yes and no. Actually there are a variety of acceptable ways to recognize revenue. The one you have mentioned is one possibility. A lot of public companies use more "aggressive" methods than that, however. Many recognize revenue once they've shipped their product, but before they have received payment. In that case, "revenue" is booked, accounts receivable rise, but no cash has (necessarily) been received.
Other companies might actually wait until well after payment has been received to recognize revenue. For example, a company which allows customers to return merchandise within a 90 day period might wait the full 90 days before booking it as "sold" (revenue), even though the product has been shipped and payment received.
So it really all depends. I've even seen cases where an order is considered "revenue", even before any product has been shipped. I'm not an accountant, but this is perfectly legal to my understanding. While MRVC's A/R represents future cash to the company (assuming they get paid), I think that all of the A/R in this case has already been booked as "revenue" by MRVC.
I have owned shares of MRVC for about 5 years, and I don't recall any earnings pre-announcements, other than an occasional "we are comfortable with predictions", etc. The company has done a fabulous job in that time period, but there is a lot of competition in the networking equipment business. One slip, and a company can fall hard (witness Madge a few years ago, not to mention CS, ASND, et al). I used to have a lot more confidence in MRV than I do now. While they have excellent management and engineering, the sector is just so competitive. It seems to me MRVC needs to develop another "breakthrough" product before the stock can move much higher. They just might do it, as they have in the past. I still have shares, and I hope that will be the case. But I would not consider success a "sure thing" with MRVC, nor would I call it a possible "next Microsoft". Just my opinion - and I will say that based on past fundamental trends, the stock is greatly undervalued. |
