Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Qualcomm Incorporated (QCOM) -- Ignore unavailable to you. Want to Upgrade?

To: Jon Koplik who wrote (32762)	6/20/1999 10:49:00 AM
From: Jon Koplik	Respond to of 152472

Time for an "I hate Gillette" rant. Here is the WSJ story on the latest developments at Gillette : June 18, 1999 Gillette Shares Slide After It Warns Of Dip in Annual, Quarterly Profits By MARK MAREMONT Staff Reporter of THE WALL STREET JOURNAL Gillette Co. shares sank Friday after the company warned that second-quarter per-share earnings would fall about 10% below Wall Street expectations and indicated that profit for the full year also would fail to meet estimates because of weak international sales. Gillette shares fell $5.25, or 11%, to close at $42.0625 on volume of more 30 million shares traded Friday on the New York Stock Exchange. Average daily trading volume is about 3.2 million. The announcement, released after the close of trading Thursday, marks the second straight quarter of disappointing financial performance from the consumer-products company, which until last year had boasted eight years of consistent double-digit earnings increases, excluding one-time items. Gillette said second-quarter earnings would fall about 20% below last year's 33 cents per share, indicating it would likely be about 26 cents or 27 cents a share. Analysts expected about 29 cents for the quarter, according to First Call, an estimate that had been reduced following a prior Gillette warning of weakness during the quarter. The company said it expected a "low single-digit" increase in second-quarter sales growth. A spokesman said sales were being depressed by sluggish economies in Japan and Brazil, and a slower-than-expected recovery in Russia and Eastern Europe, in part due to the Kosovo crisis. The spokesman said depressed European currencies also would cause unfavorable comparisons. Gillette also tempered expectations for its full-year profits. At its annual meeting in April, the company had given an earnings target of $1.36 for all of 1999, which suggested second-half earnings would rise about 20%. More recently analysts had been expecting earnings of $1.34, according to First Call. But the Gillette spokesman said earnings in the third quarter were likely to grow in the high single digits, while fourth-quarter income was expected to expand in the "midteens." In remarks prepared for analysts, Michael C. Hawley, who became chairman and chief executive in April, said the company's "recovery isn't happening as quickly as we had projected," but for the second half predicted sales "approaching double-digit growth" and earnings growth returning to the company's "more traditional levels," which a spokesman defined as between 15% to 20%. On the positive front, Boston-based Gillette said it was continuing to gain market share in several major businesses. The company said its U.S. blade business holds a 72% market share, up three percentage points, while its Duracell battery share in the U.S. had risen two percentage points on a year-to-year basis, to 50%. Gillette also said its board had authorized an expansion of a stock buyback program that started in September 1997 to 75 million shares from 50 million. The company said it anticipated the original 50 million share target would be reached by the end of this year. "These earnings disappointments are exasperating," said Constance M. Maneaty, an analyst at Bear Stearns & Co. Despite Gillette's insistence that second-half results would improve, she said the continued slow growth indicates the company "is not out of the woods yet." One piece of good news, Ms. Maneaty said, is that Gillette told analysts it planned to address longstanding problems in managing its working capital. She said the company is "the worst of any large-cap company" in managing both inventories and receivables. Copyright © 1999 Dow Jones & Company, Inc. All Rights Reserved. **************************************** I looked into some numbers on Gillette. I went to the Hoover's Online website : hoovers.com typed in "Gillette" for the "search by company name" thing. Here are a few highlights : 1. Gillette's revenues were LOWER in 1998 than in 1997. (And, we now know that trends for 1999 vs. 1998 are pretty miserable also). 2. The company's total stock market valuation (after) the big sell-off on the bad news is about $46.8 Billion. (this number can be easily obtained by clicking on the "NYSE : G (full quote)" thing). $46.8 Billion is a price to sales ratio for the company of roughly 4.5. The company has PE ratio of somewhere between 30 and 40 (depending on where the earnings "come in"). 3. The company's annual revenues (after ALL THESE YEARS (more about that in a moment)) are only around $10 Billion (!) (This a company that is so old, that it had some profound corporate developments during World War I (!). I read in a WSJ piece once that one of "King" Gillette's (the founder) brilliant marketing coups was to get the U.S. military to agree to supply soldiers fighting in World War I with Gillette razors and razor blades so that they would have the opportunity to be relatively "clean shaven" while under the constant threat of needing to put on a gas mask and hope it was air-tight against one's face). (Neat story, huh ?). This was over 80 years ago. So, now they are up to only $10 Billion ??? 4. Lastly, like so many other unbelievably over-priced (in my opinion) pieces of junk (but, it is okay (of course) because Warren Buffett says it is "great") ... Gillette is using "real money" to extinguish shares by means of a share buyback program. If fundamental concepts of arithmetic are still valid, this should weaken the company further. ******************************************* WHY DOES ANYONE WORRY ABOUT QUALCOMM BEING "EXPENSIVE" ? Jon.

To: Jon Koplik who wrote (32762)	6/20/1999 1:35:00 PM
From: Bux	Read Replies (1) \| Respond to of 152472

This "big one (handset battery) re-invigorating the little one" sure sounds similar to giving someone a "jump start" when their car battery is weak. What is the big surprise ? I'm getting conflicting stories from three people who "should" know the answer. Engineer is the only source that I have heard this claim from. I still hope it is true as I think it would be a great feature that other manufacturers have not implemented. I afforded significant weight to the knowledge of the person who said it doesn't work that way because I recall he is currently a Qualcomm engineer who should have the latest info. Also Airtouch rep gave me the same story. Additionally, the phone is not yet advertised as working this way which would be a Q blunder if it does unless the Q wants the greatness of this phone to leak slowly since they know they cannot manufacture them fast enough to keep up with demand anyway. Also, engineer said he charged the internal battery in 20 minutes using this method while the optional desk-top quick-charger is reported to take 2 hours and the standard charger 3 hours. So that struck me as odd. In all fairness I don't think engineer claimed a full charge in 20 minutes. I hope engineer is right but until the answers from others with expertise agree, or my phone arrives and I test it, I won't know. Bux