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Technology Stocks : Creative Labs (CREAF)

CREAF 0.470

-14.5%

Jan 12 9:43 AM EST

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To: Paul A who wrote (12547)	10/27/1998 8:09:00 PM
From: Brian Lempel	Read Replies (1) of 13925

I listened to the whole CC. It wasn't anything remarkable, listening to them stumbling through it as usual. They announced the future announcement of the GTW contract. They gave guidance, and I am going to go come up with a rough stimate in a minute... Revenue was suppressed by 2-3% by a reduction of graphics inventory in the quarter. They are very conscious about inventory after the CD-ROM fiasco, I think. Margins will increase to 31% next Q from 28% this quarter. Expenses will decline from 22% to about 17% (after initial marketing is done). Cash grew 18mm. 18 mm in investments, including 6 million in TDFX for strategic purposes. Asia possibly bottoming, LA looking pretty bad, especially (obviously) Brazil. DSO was steady at 47. And inventory declined. Inventory tuirns improved significantly sequentially from 5.2 to 6.6. Big news, though is buyback, which can be increased to another 10% at end of december meeting. They are seeing good sell through of new products, and don't see capacity in graphics being too constrained. DVD will become constrained a holiday peak. That's about it. Nothing special. I was disappointed that no one asked about litigation. Brian

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