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Technology Stocks : S3 (A LONGER TERM PERSPECTIVE) -- Ignore unavailable to you. Want to Upgrade?

To: John Nasser who wrote (7332)	11/4/1997 5:37:00 PM
From: Mark Zavist	Respond to of 14577

S3 Inc. to Restate Revenues The Motley Fool - November 04, 1997 16:53 SIII V%MFOOL P%TMF -------------------------------------------------------------------------------- Jump to first matched term November 4, 1997/FOOLWIRE/ -- S3 INC. (Nasdaq: SIII) lost $1 13/32 to $7 11/32 after the maker of graphic acceleration technology said it will restate revenues due to "errors in the timing of its recognition of sales to several international distributors..." The restatement of revenues will knock down EPS for the prior quarters by one-third, with the net income effect for those quarters amounting to a cumulative decrease of $0.14 to $0.29 per share. The company noted that it defers recognition of revenue on all sales to distributors until the product is actually sold by each distributor to its end customers. This is of course, proper, and prevents the kind of abuses whereby companies ship inventory to distributors without them asking for it, overshipping, and "slamming" distributors right at the end of a period in order to book revenues (all practices that actually occur). The company said that it expects the bulk of what it shipped to international distributors to be sold by the end of the fourth quarter. S3's problem, then, is that it might as well of slept through an entire quarter. The company will eventual book that $0.14 to $0.29 EPS, but it will be a lot later than expected, forfeiting the growth already built into the stock.