In response to a July 20th post, which stated:
"following Dain Rauscher Wessels analyst Marshall Leisten's
morning comments that the software company's fiscal second
quarter was more back-end loaded than usual.
Leisten expects slightly more than 50% of Bea Systems' sales
to close in July, the final month of the quarter.
Typically, he said, the company generates about half of its
revenue in the third month of a given quarter."
---------------------------------------------------------------
This information provides NOTHING unusual or useful. Companies
selling software, especially more expensive software will
notice "HOCKEY STICK sales growth to occur near the end of each and
every quarter. Some companies generate much more than 50%
of their quarter's sales during the last month of the quarter!
Cheap software will not experience hockey sticks at the end
of a quarter. There are no discounts and there is no incentive
for a customer to hold out unless there is an update scheduled.
Companies like Synopsys, Cadence, Ambit that are selling
software packages that start at $100,000+ per unit often see
hockey stick sales numbers at the end of a quarter.
The sales people are trying to make quotas and the wise
customers know that if they hold out to near the end of a
quarter, that they can get discounts. Many times these
discounts can be very large! Sometimes, depending upon the
software (and its competition) a company will hold more firm
and not allow discounts to be so deep. This would explain
a "higher average (<-KEY WORD) selling price."
If a company ships a new product on the last day of a quarter,
technically they can begin receiving money for that NEW product
during that quarter. So, of course if the product is good and
generates a lot of cash due to upgrades and/or new sales then IT
IS NOT UNUSUAL that the back end of a quarter is more heavily
loaded - DUH! Refresh my memory, the article said the company
commonly generates 50% of its sales in 3rd month. But this month
was different in the there will be "slightly more" sales generated
the 3rd month. What's slightly? Was the word slightly enough to
publish an opinion? Come on - it's garbage. Slightly = BEA
Systems new product shipment of M3 Middleware and smaller discounts
for new sales.
More importantly, BEAS is not wavering from their
short and long term strategies! They are meeting new product
schedules, making acquisitions that fall in line with their
vision, and continually seeking solid partners. Not to
mention it looks like most developers in the company
are very happy. This is a very good overall combination.
This should be an interesting month ahead for BEAS stock,
barring any larger external events such as Greenspan,
Clinton/Lewinski, SouthEast ASIA/Japan, or further NASDAQ
drops.
Regards,
Talk Cents
PS
The statement provided by "Talk Cents" is an opinion. It was
not generated or influenced by any other person or entity.
This opinion is not a recommendation to either buy or sell
BEAS stock. |
