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Technology Stocks : Trimble Navigation -- Ignore unavailable to you. Want to Upgrade?

To: David who wrote (2057)	12/30/1997 10:42:00 PM
From: David	Read Replies (2) \| Respond to of 3506

More Schroders details: The report is not especially critical, other than its inescapable "downgrade" element, and even provides an evaluation of the Ashtech-Magellan merger. It calls the 4Q results a "major disappointment" but says Trimble has good top-line growth (25-35% growth rate) and has good revenue momentum. Calls the quarter "typical" in that there are strong orders, but uncertainties about the mix and amount of shipments. Revenues are still expected to reach, or almost reach, the predicted $76.9 for the quarter. On the CUGR front, TRMB will ship about $7-9 million this quarter. What was most encouraging in the report is a throwaway line that Trimble's meeting a common US military standard for the product would result in future orders to NATO members (with a higher margin, with R&D costs already accounted for). Japan revenues next year, thanks to the Topcon deal, are expected to go from about $20 million to about $50 million. The lawsuits will cost TRMB about $700K to settle, and the additional R&D on CUGR an unexpected $750K. TRMB's backlog is increasing, and it represents a high margin mix -- sounds like the 4800 series surveying equipment. The report estimated that Orbital paid 1.5 to 2 times trailing revenues for Ashtech, and further estimated Ashtech's growth rate at 5-10% a year (about one quarter TRMB's growth), with more risk and lower returns. The analyst then, very conservatively I think, set TRMB's 12-month out valuation at the previously stated $27, based on 1.9 times its estimated $332 million in revenues for next year. (This sounds like a convenient, very conservative rationalization for the unchanged target price.) This quarter was characterized as "another unfortunate hiccup in the company's return to prosperity." Reading between the lines, I think this analyst felt obliged to downgrade, but his heart wasn't in it. I suspect Trimble will find itself in the low 20's for a little while longer.

To: David who wrote (2057)	1/3/1998 12:56:00 AM
From: JGibbs	Read Replies (1) \| Respond to of 3506

I believe that GPS will be like cassette players in the future....standard equipment for all transportation modes. If Trimble touches 18, I'm in. Thanks for the article.