Avid's first QUARTER loss of $23 million on revenues of $92 million makes the Elastic Reality and Parallax Software 1994 YEARLY revenue of $12 million seem like a drop in the bucket. Also, were either of these companies profitable on their 1994 earnings, and if so, how profitable? High end special FX software for features is also under tremendous competitive pressures, with Microsoft porting SoftImage (once only available on very expensive SGI computers) over to their Windows NT platform.
Avid's current problems are a much bigger picture, as I described in a previous post here. However, the first quarter is typically Avid's worst, since buyers postpone decisions until after the National Association of Broadcasters convention in April. If Avid can turn things around, then these NAB sales will start to show up in the next quarter's earnings. If not, then all bets are off. This market is headed toward $200 off-the-shelf nonlinear editing software running on powerful computers with built-in video capabilities--much as we have word-processors as tools to write with today. That day is still a ways off, but Avid knows that it will not be able to fetch the kinds of premiums for their products they once got when no one else was able to give them serious competition.
I made a nice profit during Avid's 1994-95 stock run up, and correctly got out when I saw all the competition coming and Avid's price and PE started hitting the high-forties. But I still believe in Avid's products, still use them, still love them. I'll be the first to jump back on the band wagon if they can turn things around and show some MOMENTUM again.
Good luck! |
