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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: StockHawk who wrote (16660)	1/28/2000 9:31:00 PM
From: the hube	Respond to of 54805

WIND I took a look at the link to the financial information. It seems that while year over year sales were up the last 3 quarters, EPS were flat or declining. Did you uncover a reason for that? The primary reason is the impact of acquisitions, and writing off acquisition costs and in process R&D. With the current merger, I would expect to see a significant charge either in the quarter endiing 1/31 or 4/30 (I'm not sure which one they would book it in). Another reason may have to do with a change they made in their pricing last June. Before that, they charged for a development license for each project a company wanted to use their software for (in addition to the run time royalties). In June, they made it easier for a company to use the software for multiple development projects without having to pay for a new development seat for each project. The thinking was that there would be some short term shrinkage in profitability, but that it would be more than made up for in the long term by having more royalty paying products designed. Additionally, they have been increasing their R&D spending. Last year, they upgraded Tornado to a new version, released for something like 30 microprocessors at the same time. Additionally, they came out with Tornado for Managed Switches, which required a large amount of resources.