Any info about Iomega (IOM)? Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Non-Tech : Any info about Iomega (IOM)?

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: Mel Boreham who wrote (57244)	7/16/1998 7:53:00 PM
From: Lance Tokuda	Read Replies (1) of 58324

Iomega Conference Call Impressions Iomega announced a loss within expectations so the major bad news was the 2% decline in quarter over quarter revenue. Given that decline, this was about the best conference call I could have hoped for: * 44% increase in disk unit sales and 35% for drives. Zip disks are really flying off the shelves like s.bateh has been saying all along. It seemed like Ingram was selling tons of disks then Iomega pre-announced a loss and all of s.bateh's numbers were pretty worthless. Well they weren't so please keep posting them! Some were arguing that sales versus last year were flat -- they were way way off. The razor-blade model has actually appeared. * Ditto has been declining for quite a while and Jazz is suffering now too because of Syquest. This is okay with me. Syquest has trashed their own stock price selling their drives at a loss to gain revenue and market share. It is very tough to compete with someone that is willing to lose money on every sale. In the vcall, it was stated that Iomega would not be selling drives at negative margins for the sake of the stockholders. Thanks Jim! The upside is that Syquest is really competing for the high end storage market. Zip had it's best quarter in company history. * Compared to previous conference calls, this one was from a totally different company. There were a lot more numbers for analysts to work with so even I could put together a spreadsheet to make predictions on what kind of financials to expect in future quarters. They expect $50M in cost reductions for the second half of the year. The management stressed their commitment to returning to profitability and I believe them since they are being paid in stock. * One interesting fact is that preliminary indications are that there is no significant difference between OEM and aftermarket tie rates. Good news for the razor-blade model. * Channel inventory was down for Jazz and Zip (9wks to 6.5wks for zip). * There was a 30-40% decline in drive return rates which shows that quality control efforts are working. Relations with Dell and Compaq are good. I can honestly say that I had doubts about whether Iomega could recover. Based on this call, I am now willing to wait for Q4 results. Iomega promised profitability and I think they can deliver. I would expect the stock to go down tomorrow based on the -2% revenue number but I think the stock will be much higher at the end of Q4. Lance

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next