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.

Strategies & Market Trends : Roger's 1997 Short Picks -- Ignore unavailable to you. Want to Upgrade?

To: Roger A. Babb who wrote (7271)	11/19/1997 5:11:00 PM
From: Franco Battista	Respond to of 9285

I just got a hold of news article that may have tanked CTXS. I find the last paragraph very interesting. This paragraph would imply that the 75 million$ from Microsoft have some strings attached in that CTXS has to spend a substantial amount of it on r+d. By Kate Berry BOCA RATON, Fla. (Dow Jones)--Jim Felcyn, chief financial officer at Citrix Systems Inc. (CTXS), said Wednesday the company expects to take a pretax charge of $4 million in the fourth quarter. The one-time charge of roughly 9 cents a share relates to Citrix's acquisition of the technology of DataPac Australasia Pty Ltd., a former original-equipment manufacturer of Citrix's thin-client/server software. Citrix bought the company in September for $5 million. Speaking at a technology conference sponsored by SoundView Financial Group, Felcyn discussed Citrix's latest product, Picasso, a thin-client/server software for Microsoft Corp.'s (MSFT) Windows-based server Hydra. Felcyn cautioned that Citrix's substantial 49% operating margins in the third quarter were "not sustainable." Revenue growth for the company's WinFrame software, which is capitalizing on the popularity of Windows NT software, increased dramatically in the third quarter, up 53% from the second quarter. "I don't know anyone that can maintain a 49% operating margin," Felcyn said. "If your revenues significantly outpace expenses, you simply can't spend enough." Citrix's research and development costs in the quarter represented just 5% of total revenue. But he said R&D costs looked "abnormally low" because a portion related to the development of Hydra was charged to cost of sales in the company's $75 million contract from Microsoft. -By Kate Berry; 305-379-3744.