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Non-Tech : Any info about Iomega (IOM)?
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To: Herb Fuller who wrote (53019)4/18/1998 4:09:00 PM
From: RetiredNow  Read Replies (2) of 58324
 
Hey Herb,

I can't really explain AOL. I posted to SR earlier saying that AOL is
experiencing the general Internet frenzy that gives them a high PE.
Formulas are harder to use when valuing erratic companies like high
tech companies. They are best for valuing mature companies. But they
can be used as a starting point for valuation.

But as for IOM, everyone keeps asserting that they are growing,
except I see sales decreasing (above and beyond the typical decrease
due to the low volume of 1st quarter).

(in millions) 09/96 12/96 03/97 06/97 09/97 12/97 03/98
Revenue 310.1 397.1 361.3 400.2 431.7 546.8 408.0
Net Income 12.8 20.4 23.0 26.2 30.0 36.1 (18.6)
Net PM 4.1% 5.1% 6.4% 6.5% 7.0% 6.6% (4.5%)
Share O/S 274.1 273.4 271.4 272.9 274.1 283.5 265.7
EPS .04 .07 .08 .10 .11 .13 (.07)

As you can see, from 12/97 to 3/98, revenue decreased $138.8 MM or
25%. In the prior year (12/96 to 3/97), revenue decreased $35.8 MM or
9%.

So this quarter, we should have expected at least a 9% decrease due
to seasonality (remember last year IOM was growing gangbusters).
Therefore, in the current year, 16% of the 25% was due to a slow down
in sales. I think the slow down will become more readily apparent in
the next quarter's report.

Herb, why do you think IOM experienced a 25% decrease in revenues vs
the 9% decrease of the prior year? I'd be interested to know.
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