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Technology Stocks : Newbridge Networks
NN 14.21+1.7%Nov 28 9:30 AM EST
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To: Doug who wrote (9734)2/19/1999 1:44:00 PM
From: Thomas Scharf  Read Replies (1) of 18016
 
>>My only concerns were their productivity viz Rev/employee. << Revenue per employee is no longer a strong indicator for electronic manufacturing companies because so many of them out-source assembly the actual manufacturing work which cuts head-count in exchange for a direct expense. For example take 2 hypothetical companies with the the same gross revenue of $1B/yr. Company "A" may have 5000 employees, half of whom are involved in manufacturing the product giving them a rev/employee of $200K/employee. Company "B" has 3500 employees, and has all its sub assemblies manufactured at Solectron (for example) and pays an equivalent amount of cash to the cost of the missing employees and the capital investment to support them. That gives a rev/employee of over $285K/employee. It probably makes more sense to look at earnings/employee (before 1-time charges).
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