Hey check this out from www.yahoo.com:
Partnering misterelephant
Jul 23 1998
1:36PM EDT
Please explain what incremental revenue these partnering announcements will produce:
Ericsson is one of the largest sellers of GSM equipement, many of their customers use LHS already, this is not an exclusive agreement with LHS, Ericsson gets a 15% commission on every sale. Would LHS have gotten this revenue any way (eg is it reflected in the huge forward earnings multiple?)
Bell Atlantic--Formalizes an existing agreement in exchange for some price concessions.
Telecom Italia-- LHS is "one of the preferred market solutions for their internation solutions". Oh yes, more pricing concessions.
Also I do find it strange the LHS' Asian revenue has stayed at 12% of total for the past 6 quarters while total revenues have grown sequentially 3%,12%,24%,12%,3% and 14%. This means that Asian Revenues have grown at the same rate in the face of massive dislocations in Indonesia and Malaysia. Cellular subscribers in Hong Kong have grown but is unclear that it has been at LHS customers. Also what is the status of the Indian Cellular Carriers. SAP and CA have indicated substantial negative demand impacts from Asia, not LHS. SAP took a $10 million write down. Not LHS, they deferred the receivable (which increases DSO to 87 days). We do not yet know the A/R provision for Q2, awaiting the 10Q filing.
Also 976k (pretax) of $6 million of net income is interest income. Why pay 120x for interest income?
Refer to a June 1 1998 Wireless Week story (see on line) regarding billing system problems at Pac Bell Wireless, a CDMA installation, Are there others pending? Does anybody know the whether the cancellation rumors are true? What cost will LHS bear to fix this situation (is it in unbilled receivables)?
Why was LHS 3 months late in installing the NEXTEL latin America billing systems. (where is the cost? will it be recovered? is it in unbilled receivables)
Look LHS has a good product, but no tree grows to the sky.
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