Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Aspect Telecommunications (ASPT) -- Ignore unavailable to you. Want to Upgrade?

To: John McDonald who wrote (1944)	1/23/2001 7:35:36 PM
From: Herschel Rubin	Respond to of 2018

There were some conservative forward projections in CC, but no surprises. Given the mild recessionary outlook for the first half of the year, Betsy Rafael, CFO, said they were taking a very conservative approach and lowered guidance for FY2001 to a range of 15c-25c EPS. The good thing is that this will ensure that all analysts are on the same page in their projections, allowing room for upside surprises. Assuming 25c for 2001, at $9/share ASPT currently trades at a forward PE ratio of 36, which is actually low for a software company with growing margins and leader in CRM Portal software, which Beatriz referred to as "Contact Server" software. Worthy of note is that Beatriz Infante mentioned that in spite of talk of a mild recession, "the pipeline is strong." But she said their conservative forward guidance is necessary because they cannot predict whether ASPT's customers will defer orders due to their own concerns of recession. [From the way the stock market is behaving lately, one would think investors are already discounting a mild recession and looking forward to the second half.] When asked if the problems at Quintus (QNTS) have also helped ASPT's competitive position, Beatriz responded, "Very much so. Yes." She also said in an economic environment where there is decreasing demand [for products & services by their customers], "most companies loook to how they can get more leverage out of their existing business." [Which would mean cutting contact center costs with portal solutions.] And then she cited that one of their large customers cut 10% of their contact center costs by implementing ASPT's CRM Portal on top of an existing SEBL/Nortel contact/call center. There was an introduction of a new term for ASPT's CRM portal as essentially a "Contact Server" IMO, they should dump the term "Customer Relationship Portal" and supercede it with the term: "Contact Server" because most people don't get the "Portal" concept, but they DO understand the idea of a "Server". Beatriz mentioned how Oracle is a provider of "Database Server" software just as ASPT is a "Contact Server" software provider. Looks like the company turned in -4c EPS excluding sale of marketable securities, or a BREAKEVEN quarter when sale of marketable securities are included. The Consensus estimate was -2 cents, but I'm not sure if those estimates were assuming the sale of marketable securities which has contributed to the bottom line during the past few quarters. If the consensus estimates included the sale of marketable securities, then this quarter represents a 2c upside surprise, if not, then it's a 2c downside surprise. Last after-hours trades were $9 5/16 and $9 1/4. We'll see how the market responds to the conservative forward guidance tomorrow. Most companies that have guided lower during this earnings season have actually rebounded because the uncertainty of huge quarterly misses were removed and their forward looking statements didn't indicate the sky is falling as the December-January stock markets would have us believe. Book Value: According to the Q4 Balance Sheet, ASPT shareholder's equity is $316,767,000 divided by 51,172 shares out a/o 12/31/00 yields a book value of: $6.19/share. At today's close of $8 27/32, it looks like the market is valuing ASPT's business at just $2.65/share more than book value!!! Or, put another way, the market is valuing ASPT's core business at $135.8 million over book value. Not bad for a company with FY2001 sales expected to be $690-708 Million based on their statement in the PR that "overall fiscal 2001 revenue should increase by 17% to 20% over fiscal 2000" and 2000 revenue was $590.5 Million. They also bought back 350,000 ASPT shares [I believe this is correct from my notes] during the quarter, reducing the shares outstanding to 51,172.