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Technology Stocks : Veritas (VRTS)

VRTS 164.70

+2.1%

Dec 22 3:59 PM EST

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To: The ChrisMeister who wrote (236)	10/7/1998 12:49:00 PM
From: Mark K.	Read Replies (2) of 742

The bottom line EPS for Veritas is going to get crushed because of the huge amount of goodwill amortization. That is what the CEO was addressing when he stated "Wall Street needs a bit of time to get used to the new accounting of not looking at goodwill amortization." At the original price, the company was talking about an $80 million charge per quarter. Will investors back out the goodwill charges? Will IBES and First Call and the other estimate reporting groups back out that charge? Should it be backed out? Makes a big difference on the P/E valuation. Another question: Does Legato compete with Seagate Software, in the low-end, Windows NT market? That market uses a two-tier distribution model. Legato has no such channel. I'm not sure I understand how this will have any effect on LGTO… Mark K.

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