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Strategies & Market Trends : Market Gems:Stocks w/Strong Earnings and High Tech. Rank -- Ignore unavailable to you. Want to Upgrade?

To: Jerry Olson who wrote (57235)	8/24/1999 12:26:00 PM
From: Tim Luke	Read Replies (2) \| Respond to of 120523

mer...100 to 125 in 1999 for a position play. day trading msft,ntop,sunw. only call i put out today was sunw at 74....come over to my site jerry i would love to have you there...you know i always have respected you

To: Jerry Olson who wrote (57235)	8/24/1999 12:37:00 PM
From: kendall harmon	Respond to of 120523

TDFX worth looking at for a bounce, IMO ckelly7279 on the yhoo thread Sorry if this has been posted, but I don't feel like reading 100 posts from yesterday. I'm long 3000 shares so I took a long look at the numbers and here is what I saw (rose colored glasses maybe). The bottom line is that Murphy's law (not Moore's ) applied to TDFX last quarter. The other factor is that 3dfx did a piss poor job of explaining the results. The analysts were so steamed that no one asked questions about the good things 3dfx did this quarter. 4 Significant Events took place Q2 which effected the eps: 1. 1 Time write-off charge and amortization of goodwill. 2. Price Protection Reserve Charge Taken. 3. V3500 delayed because of 3d party screwup - $3 mill of revenue will be pushed to Q3. 4. 13/14 days of May sales are gone forever - $13 mill of sales. Each of these events NEGATIVELY effected the eps. They are also 1 time events (although ammort. will continue it only benefits the Company from a tax point of view). I looked at what the earnings were BEFORE TAXES and estimated the cost of each of these as follows: Loss before tax credit as reported was <$13,646> or <.59>/share. 1. The 1 time write off and amortization accounted for <$7,276> or <.31>/share. 2. The Price Protection charge (est. $4.750 mil) accounted for <$4,750> or <.205>/share. 3. The May crew up cost ($13 mil revenue at 35% GM): $4,550 or .195/share. 4. The V3500 screw up cost ($3 mil revenue at 35% GM): $1,050 or .045/share. So, without the #1, 3dfx's EBIT was <.28>/share. Without #1 (Merger) & #2 (PP), 3dfx's EBIT was <.075>. Add #3 (Revenues which are not "reportable" because of merger), 3dfx's EBIT was .12/share. THIS NUMBER GIVES YOU A TRUE PICTURE OF WHAT HAPPENED operations wise. Add #4 (which we will get in Q3 even though we lost in Q2), 3dfx's EBIT was .165/share. This is what operations should have looked like if 3500 shipped on time. In other words, 3dfx packed all the bad news and 1 time charges into this quarter. If we would have had the May sales our eps number "could" have been <.16>/share or .10 before one time charge and amortization of goodwill. I say "could" because it is likely that 3dfx "would" have taken PP to the tune of .06/share to have earnings fall in line with estimates. Bottom line is that 2 CFOs, 1 CEO, 1 CTO could not explain this to the analysts.