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Technology Stocks : Westell WSTL -- Ignore unavailable to you. Want to Upgrade?

To: Andreas Helke who wrote (8975)	1/15/1998 12:55:00 PM
From: SteveG	Respond to of 21342

<..And Trey seems to be a pissed off victim of such screwed up reporting with his Micron experience...> Hi Andreas- Knowing and respecting you, I'll continue this discussion. First, as I pointed out, MU traded DOWN from it's pre-earning's close of 42 5/8, and traded below this price for 3 1/2 weeks afterwards, before it began trading up. The later move had nothing to do with the non-recurring charge not being clarified in the EPS (it WAS, in both the 10Q and the earning's press release). If Trey got burned, it was independent of his, or the street, mistaking a non-recurring gain. <..But it happens often enough that the media screws up the reporting if there is a special situation...> If the special situation involves the accounting of a major M&A, where there is often a fair amount of accounting grey area, then sure, analysts would have a time ferreting out the specifics of the earnings. But a clear non-recurring gain (from something such as a sale of assets), especially where the EPS exclusive of the gain is CLEARLY broken out (and reported clearly on the Dow Tape), would NOT result in such confusion. At least not to anyone whose buying as a result would make any difference. Do you see the distinction with your ASND/CSCC example? Where would the hypothetical someone who might buy WSTL on their earning's report GET the earnings report? From the company PR? The gain will be broken out and an EPS exclusive of gain will be clearly reported. From the Dow Tape? The real EPS will be clearly reported. In the event CNBC reports it? They would get their numbers from the tape/company, and know full well the difference. Will someone go to the trouble of knowing what the FC or I/B/E/S consensus estimate is for the purpose of making an investment decision based upon any difference, and then buy on the basis of an EPS number which includes the gain? There may well be some such folks out there, but their buying wouldn't have any appreciable or persistent effect (that is not fairly quickly info-arbed out). Could the stock rise if their EPS, exclusive of the non-recurring gain, were at or below the consensus estimate (since the gain comes in Q4, the FY98 consensus estimate is, as of Dec, a loss of <.44>)? Of course it could, but not because of mistaking the gain for increased sales or margins. I'm confident you see this point, and respect you enough to continue the discussion if you feel it is warranted. Regards- Steve