Iomega - A Civil Discussion Message Board

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Non-Tech : Iomega - A Civil Discussion

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To: Dale Stempson who wrote (114)	3/15/1997 3:35:00 AM
From: Dale Stempson	of 1908

RE: Q1 Earnings Estimates Iomega has repeatedly stated that a top priority goal is to offer a $99 external ZIP drive. In order to do this they must of course continue to reduce costs. So far they've been successful. Last quarter they were able to increase gross margins from 26% to 29% compared to the previous quarter. This happened even with the $100 price drop on the JAZ in the 3rd quarter and the ZIP rebate. This quarter we will see the effects of their current cost reduction efforts without any additional reductions in list pricing. I would certainly expect costs to have been lowered significantly if Iomega is on schedule to achieve their $99 price target. At some time in the near future we're going to have to see margins reduced due to lowered prices. Until then, we should see margins increase. ********** Here's my wild ass guess for Q1 Earnings: Sales of $340 million, (10% increase over September quarter and 15% less than December quarter). Net Profit Margin of 7.5%, (1.0% increase over last quarter) EPS of $0.19 Regards - Dale

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