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Technology Stocks : Creative Labs (CREAF) -- Ignore unavailable to you. Want to Upgrade?

To: C S Lai who wrote (6652)	12/6/1997 7:14:00 PM
From: Douglas V. Fant	Read Replies (1) \| Respond to of 13925

Stanley, You provided a very important piece of information with the European growth rate in PC's of 15-17% in 1998. Note above that I cited a US Dept of Commerce report estimating 30% growth in unit sales of both computers and peripherals in the US. Now let's tie in the Merrill Lynch prediction of an 18% decrease in sales in Asia generally (Japan not differentiated- in reality Japanese sales are likely to be flat as they were this year for computer/peripheral sales). For lack of better information we will assume an 18% decrease in sales in Latin America too. OK- on Page 38 of Creative Technologies Annual Report CREAF reports "external net sales made to customers in:" Singapore $54,713 The Americas $580,211 Europe $326,423 Rest of World $271,610 Total $1,232,957 Now this is going to be very arbitrary but let's apply the growth/decline rates predicted above by the various organizations to these 1997 figures: Singapore- No Change (as these may be FOB Factory sales) The Americas- $580,211 x 30%= $174,063 Europe- $326,423 x 15%= $48,963 Rest of World $271,610 x -18%= $(48,889) ______________ Net Change in Sales= $174,137 Now divide that number by last years total sales of $1,232,957, and you get a net +14.12% increase in sales for CREAF worldwide in 1998. So this roughhewn calculation with current projected demand rates by reputable institutions suggest that CREAF's management prediction of 10-15% revenue growth in 1998 is dead on with the macroeconomic estimates of computer/peripheral demand worldwide..... Sincerely, Doug F.