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Technology Stocks : Avid Technology
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To: JLM who wrote (584)10/22/1998 6:04:00 AM
From: BMcV  Read Replies (1) of 777
 
Any ideas why the guidance (ie preannouncement) was so far off the actual results? At Yahoo they're saying preannounced revenues were for $112 million, while we came in with $116, so that extra bit could account for some of the differences, assuming they had their expenses pegged correctly. But even if that $4 million were all profit, that's "only" 17 cents. Add in the 4 cents estimate and we're still at just 21 cents.

Why preannounce if you're only a little weak? Why say "modest profit" when the quarter is basically on track? What are the analysts who follow this stock going to think about the company after being misled?

I'm long, but I just have not seen anything like this, where a company warns, takes a 50% hit, then basically meets the original expectations (ok, 10% light). Are they playing games, or don't they have a handle on what's going on? There may well be some nervousness coming into the trading after the initial rush of enthusiasm this morning.
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