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Technology Stocks : Citrix Systems (CTXS) -- Ignore unavailable to you. Want to Upgrade?

To: David Perfette who wrote (6804)	7/21/1999 1:41:00 PM
From: Muthusamy SELVARAJU	Read Replies (1) \| Respond to of 9068

The precise rules around software licence revenue recognition are still loose enough that much financial management discretion can be applied as to what portion of the billed revenue can or should be deferred. This question has been amply demonstrated by Microsoft, which had recently agreed to certain SEC findings, which concluded that in fact, Microsoft had put away too much revenues in its balance sheet. I'm speculating that CTXS could be applying the same 'discretion' ie hiding away more than its fair share of Q2 revenues in deferred revenues, resulting in lower EPS in current quarter, to be released in future quarters. Now, the reason I raise this is because unlike MSFT, CTXS Metaframe and their other products' license revenues are essentially product sales requiring minimal deferral requirement, as they are not in the business of pre-selling old versions of MSOffice which can be replaced free of charge with new versions of MSOffice of Windows 98 or whatever. Consequently, IMHO, I would have expected that CTXS should have recognised in its current quarter (Q2) P&L at least an additional $6m in revenues, most of which (less 36% corporate taxes) would have dropped to EPS, resulting in another $0.03-0.04c additional EPS. I do take your point, it is only a timing issue, ie they will have to release it to the P&L soon, as you can only build this reserve for so long...but, CTXS model should not warrant as much as it has held up in its Balance Sheet, but I'll wait for their 10Q report in another month before coming back to all of you as to whether the $6m I'm referring to above was really there.... Still long CTXS, as always, tho hurting badly... BTW, does anyone have the inside scoop on the FedEx contract. IMHO, the FDX contract is the most visible technology battlefield between Mr. Iacobucci's view of the world vs. those espoused by Messrs. McNealy and Ellison. For the moment at least, I've laid my bets with the folks in Florida, but it'd be great to have a view on what's happening at FedEx.