Read this today in Singapore Business News:
Creative Technology, which launches its much-touted Sound Blaster Live! card today, is expected to report a 57 per cent plunge in fourth-quarter earnings tomorrow morning.
The sound-card maker, hit by slowing sales of graphics and audio cards and the Asian financial crisis, had warned in June that its fourth-quarter sales would be 10 per cent lower year-on-year instead
of flat as previously forecast. It also said margins would fall to the
mid-20s instead of its earlier projection of 30 per cent.
A BT poll of five analysts yielded an average Q4 earnings per share
forecast of 23.7 US cents, down from 55 US cents in the fourth quarter ended June 1997. They expect full-year earnings per share to fall by an average of 3.4 per cent to US$1.77. This compares with Wall Street analysts' predictions of 17 US cents for the quarter, according to Zack's Investment Research. The Estimate Directory,which collects Singaporedollar estimates, has a consensus forecast of a 9 per cent rise in net profit to S$259.6 million.
Analysts are now waiting to see if Creative will stick to its earlier
1999 forecast of 20 to 30 per cent sales growth. The big determinant
will be its new product, Sound Blaster Live!, which promises
"environmental audio", enhancing sound quality and providing an
immersive experience for users.
They are also waiting to see if users with just two speakers can benefit significantly from Sound Blaster Live!, said to work best
with multiple-speaker systems.
Kay Hian associate director Stephen Chan noted that the product had
so far received strong previews from the technical press, but said
Creative would not benefit from strong sales of the product until the
traditionally-busy second fiscal quarter due to the Christmas gift
season in the US and Europe.
There are also concerns that Creative has lost some ground in the
sound market to up-and-coming rivals such as Aureal Semiconductor,
which has won contracts with leading PC makers Dell and Compaq.
Bernard Tan from Merrill Lynch, who sees earnings per share falling
20 per cent for the year ended June 1998, said: "The challenge for
Creative is how they can make Sound Blaster Live! so successful that
it will exceed everybody's expectations,despite the economic climate."
Sound Blaster Live! started shipping last week and is expected to be
released in Japan and the US next week, and this week in Singapore. |
