Message to Mondoman (and any other interested parties)
Package software companies (like PSFT) have traditionally for years had strong 4th quarters. It seems to have to do with the sales cycle and the push to close business. PSFT is no different. If you look at quarterly revenues for 1994 and 1995, you will see almost identical percentages (of annual revenue) each quarter.
For 1995, PSFT made 17.6%, 22.5%, 26.4% and 33.4% of revenues in each quarter. For 1994 the annual revenue breakout by quarter was 17.8%, 22.05%, 26.2%, and 33.9%. So, the third and fourth quarters are definitely the strongest, with the fourth being the biggest overall.
If one assumes this trend is continuing in 1996, then assume the first three quarters of 1996 represent %'s of total annual revenue. For the percents in 1996, assume the average of 1994 and 1995. This means Q1 through Q4 of 1996 will be 17.7%, 22.3%, 26.3% and 33.7%. Using the q1 thru q3 figures projects annual revenues of 453.3, 451.1 and 439.5. So which is the correct projected annual figure?
Assume an average of the three and you get $447.1 million. Using the projected % for the fouth quarter of 33.7% and the actuals from Q1 thru Q3, you get projected annual revenues of 447.3 million. This means Q4 revenues of about $150+ million, about 98% more than last year.
I hate to say it, but unless PSFT has a gangbuster Q4, they won't make the 100% growth in revenue at least. It may be there in net income and EPS for all we know.
So I suppose it looks good for the bulls if PSFT beats 150 million this quarter and 450 million for the year. The bears will look for worse numbers. Look out if they hit $455 million (don't you think?).
As for stock performance in these quarters, realize that qtrly results come out almost one month into the next qtr. And I know you've been around enough to know that there are other froces and factors at work which impact the stock from time to time. In 1995, the stock got a huge boost during and after the annual users conference in September. This prob. impacted ability to grow in October. I can't remember exactly, but I believe early Nov. was strong. Isn't December often weak with year-end selling. Also, there were annoucements in Dec, regarding insider selling which had taken place in November around the split date. There was a general downtrend in US stocks in January 1996. But when the Q4 and annual results came out, PSFT took off like a rocket again.
Anyway, suit yourself - I just thought I would contribute the data regarding strong and weak quarters.
Raptor |
