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Technology Stocks : eidos--maker of Tomb Raider

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To: Jack Be Quick who wrote (929)5/27/1998 2:44:00 PM
From: Neil Kalton  Read Replies (1) of 1773
 
John,
While the $.26 is in line with expectations the whisper number must have been considerably higher considering the stellar numbers in the 3rd quarter. Many were surprised (including me) that after the 3rd quarter blowout that the Volpe Brown didn't raise their 4th quarter estimate above $.26. Well, VB was right.

That being said, the consensus estimate for FY98 is $1.39 and for FY99 $1.60. Given that EIDSY reported in line with estimates and the strong stable of games for the remainder of this year I do not see any reason for these estimates to be revised lower. If they are I will take note and will consider selling depending upon the extent of the downward revision.

I wonder if part of the disappointment in the numbers was not due to Deathtrap Dungeon not being released yet in Europe. While this may have negatively impacted the 3Q it will positively impact a future quarter.

The future definitely looks bright with guaranteed hits in Final Fantasy VII and Tomb Raider III; potential breakout hits with Daikatana, Commandos, Ninja, and Omikron; plus DD Europe and Championship Manager.

At $17 EIDSY has a forward PE of 12. I feel today's selling on slightly disappointing earnings has been exacerbated by the deteriorating broader market.

-nk
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