To: Bosco who wrote (77 ) 5/26/2000 8:14:00 AM From: Jim Oravetz Respond to
Cable Design Technologies (CDT) 28 3/8 closed: This worldwide provider of high-speed network connectivity products reported its fiscal third quarter earnings after the close last night, and a cheer must have gone up among shareholders. Not only did the company beat consensus estimates of $0.41 per share by six cents, it also beat that dumb whisper number by four cents. These results compared to the year-ago period in which the company posted a profit of $0.29 per diluted share. However, the company did acknowledge that the comparison period was a bit soft since last year it was awaiting the ratification of TIA/EIA network cable standards. That notwithstanding, it would be remiss not to point out that CDT managed to easily surpass this quarter's expectations on 1.2 million more diluted shares outstanding. Gross margins improved to 28.8% from 28.1%, operating margins increased to 12.8% from 10.6%, and net sales jumped 15% sequentially and 24% year-over-year to a record $204.9 million. In fact, the year-over year increase in sales was CDT's best performance in eight quarters. Sales gains were driven by double- to triple-digit increases across many of its product lines, highlighted by a 121% surge in gigabit network cable sales and a 73% pop in central office cable sales. Aside from capitalizing on its position in high-growth markets, CDT is managing its business better, too, as as it is paying down debt and controlling costs. As a percentage of sales this quarter, SG&A decreased to 15.4% from 16.7% last year. Overall, then, CDT turned in a solid quarter, and based on current conditions, said it believes it will achieve 5%-10% sequential earnings growth and a FY00 earnings growth rate of 20%-- not bad for a company that currently trades at 16.4x est. FY00 earnings and 14.9x est. FY01 earnings.-- Patrick J. O'Hare, Briefing.com
