My advice is probably worth what you paid for it.
But if you're going to blame me if you lose money, then you might as well send me half of what you make. Sound fair?
I wonder what they will say in the conference call. Everybody already knows pretty much what happened in the SepQ, the questions are:
What about the new "box-build" contract?
I suspect they won't be able to answer this one yet.
How much of a rebound do you expect to see in the Dec Q?
They said in the press release that they would be providing guidance in conjunction with release of the earnings report tomorrow. They have already indicated that they expect a sequential improvement in operating earnings from the 24-26 cents they expect to report tomorrow. Last Q they forecast 45-50 cents for the DecQ. If the box-build contract is still unknown, then I expect they will guide toward 35-40 cents for the DecQ.
Will the new acquisitions in China and Germany be accretive, and if so, about how much?
I think they will low-ball the accretive effects of these two acquisitions.
What do they expect for 1999? My guess is that they will say $1.80 to $1.90 per share, with upside potential if the new contract is retained, perhaps along with cautionary statements about other economic or business uncertainties. Bottom line though, is that they will repeat their statement from the press release that the earnings will grow at least 50% from this year. If they earn 25 cents in the SepQ, and 35-40 cents in the DecQ, then the full year 1998 will be $1.08 to $1.12. A 50% mark-up from there, puts earnings at $1.63-1.68, versus the $2.00 they forecasted last Q. I don't think they will guide that low, but that must be the fear of two analysts who dropped their 99 estimates to $1.50 this week.
If the company does guide to the $1.80-1.90 range, this stock should see a nice bounce. If they are able to retain the Bay program, then I suspect the stock is headed toward 20 by the time of the next earnings release. I like the risk/reward ratio, and I'll take a ride on the Dii roller coaster.
Paul |
