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Technology Stocks : All About Sun Microsystems -- Ignore unavailable to you. Want to Upgrade?

To: Steve Lee who wrote (40588)	1/19/2001 4:07:21 AM
From: craig crawford	Read Replies (2) \| Respond to of 64865

But the street looks at operating earnings! The 0.12 number is not operating earnings. The 0.16 number is. Now you can make the argument that the street has been wrong all these years to look at operating earnings instead of net, but like it or not that is how the game is played. >> 70 PE? That's simeple. Multiply $0.12 by 4 to get the run rate. << That's ridiculous! First of all give up on using the 0.12 number, SUNW's earnings were 0.16 If you don't believe me read all the press reports and watch CNBC tomorrow. They will all use the 0.16 number. Furthermore, if you use the same numbers for the next 4 quarters you're assuming that a company will have no growth. That is a serious short-change to companies like SUNW who continue to grow the earnings sequentially, and can also give too high of a PE for companies like INTC who sometimes see their earnings go down sequentially! Extrapolating a 4 quarter run rate from a single quarters earnings is only useful in instances like when an emerging growth company has losses for several quarters but begins to turn profitable. Obviously it wouldn't make much sense to calculate the PE from the prior 3 quarters because there were no profits and the company is showing improvement quarter to quarter. Here is a peek at the first reaction from a SUNW analyst. Analyst: Despite Light Revs., Sun's Results Were Respectable Friday January 19, 12:16 am Eastern Time biz.yahoo.com