To All: Seems like Sood is at it again.
Robertson, Stephens & Co. analyst Paul Johnson is alos cautious.
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CHICAGO, Jan 21 (Reuter) - U.S. Robotics Corp's (NASDAQ:USRX)
results for its fiscal first quarter ended in December met Wall
Street expectations, but analysts said there is still some
concern about the current quarter.
"This was essentially an in-line quarter, but I think what
we're talking about here given the inventory in the channel and
the timing of x2 makes March another challenging quarter," said
Rakesh Sood, an analyst for Hambrecht & Quist, referring to new
high-speed modem technology known as x2.
"June and beyond look very good as the technology has
broader acceptance," he said.
Modem maker U.S. Robotics reported earnings for its fiscal
first quarter of $0.72 a share, versus $0.45 a share last year.
Revenues were $645.41 million versus $364.81 million.
According to First Call, the consensus on analysts'
estimates was $0.72 a share. And analysts said on average Wall
Street was expecting revenues of about $640 million.
U.S. Robotics is in the process of switching to a the
high-speed x2 modem technology. The company, based in Skokie,
Ill., said with the new technology users can dowload
information from the Internet, for example, at speeds nearly
twice as fast as common modems.
"It made the numbers, but with continued deterioration to
the balance sheet," said Robertson, Stephens & Co. analyst Paul
Johnson.
He said the days of receivables, which measures how long it
takes customers to pay, grew by 15 days compared to the
company's fiscal fourth quarter. He said the company reported a
sequential increase of 18.5 days in that quarter.
"It calls into question the quality-of-revenues issue,"
Johnson said. "March is going to be a tricky quarter in the
midst of the upgrade, and at the same time stretching their
receivables. It looks kind of tenuous to us."
There had been some question as to whether the company
would meet the fiscal first quarter expectations, as some
analysts were concerned that customers would put off purchasing
and wait for the new x2 technology or even a standard 56-kbps
technology.
Also, analysts expected an increase in spending in relation
to the x2 product launch. U.S. Robotics said its operating
expenses were 25.6 percent of sales versus 24.3 percent of
sales for the year-earlier period, and the increase related to
additional selling and marketing costs.
"I thought they had an excellent quarter given the
transition," said John Grangaard, an analyst for GS2
Securities.
Copyright 1997, Reuters News Service |
