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Strategies & Market Trends : Option Trades -- Ignore unavailable to you. Want to Upgrade?

To: scotty who wrote (466)	1/14/1998 11:09:00 PM
From: zx	Read Replies (1) \| Respond to of 2341

Hi Scotty, my timing certainly could be better. most of my new option postions have turned against me. they were profitable at one time. here is a reason why PHB- pioneer hybred may be under pressure. remember- the earnings reported last week were poor. Here is some news issued by DKB today, warning of flat earnings for 1998. DEKALB, Ill., Jan. 14 /PRNewswire/ -- DEKALB Genetics Corporation (NYSE: DKB) said today that it expects fiscal 1998 earnings to be comparable to the $.80 per share earned in fiscal 1997 due to higher seed production costs and lower hog prices. The company had earlier said that fiscal 1998 earnings could increase 20 percent over the prior-year level. CORN SEED COSTS "Corn seed costs are now expected to be significantly higher than originally anticipated," said Richard O. Ryan, president and chief operating officer. "While we had expected our summer seed crop to approximate targeted levels, our December and January bagging experience would indicate that finished units will fall well below target. Further, the cost of our record-large winter seed crop has escalated due to weather factors, necessitating a higher proportion of expensive air transportation of seed back to the U.S. Earlier, we had anticipated that higher selling prices would offset higher unit costs. Now, we expect a $2.00 per unit margin decline from fiscal 1997." "Obviously, we are disappointed with no earnings increase in 1998," added Bruce P. Bickner, chairman and chief executive officer. "The good news, however, is that corn seed supplies are sufficient to meet our sales goals, and our bagged seed is of excellent quality. In addition, customer demand is very strong for DEKALB's specific-trait products, especially Bt corn hybrids and Roundup Ready(R) corn. It is still early in the selling season, but we continue to expect a one percentage point increase in our North American corn market share. Moreover, several of the factors increasing our seed cost estimates in 1997 are unlikely to repeat in future years." PHB has a high PE and has unrealistic expectations for earnings this year (i hope). ag