Yeah, those are the drawbacks of a CEO willing to speak "off the cuff". I would still prefer that a company be willing to share their "unofficial" thoughts and provide some specifics when asked as opposed to sticking strictly to the script. I figure in the long run, if the company puts up the numbers, the stock will take care of itself.
So, what didn't the market like?
- company really reported .328/share, not .33
- lower tax rate contributed another 2/10 of a cent per share (non-operational)
- even with lower overall revs than expected, SGA and R&D were much smaller as a percentage of revs than year ago period, indicating they held back to help in making the quarter (contributed 1-2 cents, which is a lot)
- rate of R&D capitalization a little high, adding another couple tenth of a cent
- product revs light, which reduces visibility for services revs
Put that all together, and it was a typical SE quarter, strong absolute performance, but a sloppy quarter in terms of achieving the guidance they set for the Street. I am a holder of this one, but had purchased below $30 and sold half at $43, primarily based on the sloppiness these guys usually display. Hard to argue with 20X calendar '99 EPS, but I would probably wait anyway for an even cheaper opportunity, especially consider that the overall market seems to be out of steam.
Turs |
