MY COLD ANALYSIS OF THE CC: SHORT VVUS GOING FORWARD
-Revenues have fallen sequentially for the sixth straight quarter.
-.12 'profit' is the result of one time milestone payments, and therefore not valid in any earnings calculation. VVUS posted a one penny (LOSS) against OPEX.
-with the inventory channel filled, they will post wider losses in the upcoming two quarters.
-OPEX will increase in the next two quarters, with 'no significant int'l revenues during 2nd and 3rd quarters.'
-specifically, (in addition to R&D) MARKETING expenses will rise, which suggests that a domestic partner is nowhere in sight.
-Spain, Italy and France will not be launched until Fall, which suggests A/Z is taking a cautious approach, and implies something less than total enthusiasm for the product. After all, it's paid for, why wait?
-reorders not expected for Germany until 4Q.
-'our goal for the year, is to break even, including milestone payments.' Ouch. Translation: 'Including our big 4th quarter, we will lose 24 cents a share going forward.' Obviously, PW's estimates are going to have to be cut.
-OPEX was reduced primarily because 'Cost of goods sold' was down significantly, once again. At first glance, this looks good on a balance sheet, but it's a losing statistic. 'Cost of goods' is down because they are producing (read: selling) less product.
On the whole, VVUS remains in the same limbo it enjoyed when it was a $2 stock November-March. Gravity will play a role now. At $5, there will be more money to be had in the next month or two going short rather than staying long.
That's my call, anyway. Good luck to all longs. |
