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

To: Charles Tutt who wrote (48213)	4/12/2002 7:51:23 AM
From: cfimx	Read Replies (1) \| Respond to of 64865

>>then at an incremental margin of 50% where did you get that number? what's your basis. Does it happen to fit your conclusion?

To: Charles Tutt who wrote (48213)	4/12/2002 8:15:15 AM
From: cfimx	Read Replies (1) \| Respond to of 64865

>>boost revenues back to the $5B/Q they actually did a few quarters ago, then at an incremental margin of 50% they'd have EPS in the neighborhood of .30/Q. in a good year (remember those?) suncom brought about $.10 to the bottom line. now they're talking about trying to get to 10% OPERATING NUMBERS. Let's say they do. Then you take out taxes, which leaves 6.5% margins. That's $1.3B net, on 3.25 billion shares, which gives you $0.40 PER YEAR. At any case, next year, the guys who know (analysts yuk yuk) say that suncom will have $.19 of earnings for june 03, on about $15b of sales. Say they grow sales @ 20%. Takes TWO more years to get to $20b in sales and $0.40 in earnings. Place a 20 multiple on that. That's $8. Discount that @ 12% for three years gives you $5.70. Suncom should be $5.70 today if you believe that they can recapture the majik. I don't think they have enough press releases. your scenario brings down almost $.20 to the bottom line for every $1 of sales. Those are some Lion of Judah sized margins CT. Did JC help you with those figures?