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Technology Stocks : DSC Communications -- Ignore unavailable to you. Want to Upgrade?

To: OldAIMGuy who wrote (3521)	1/30/1998 2:40:00 PM
From: Moe Damghani	Read Replies (3) \| Respond to of 4429

All, I just got the report from Lehman Brother (Todd Koffman is the analyst) on DSC. Very Very positive report, it came out on Jan 27. I am listing the web address in here for you to read it but you may not be able to get into it. He has a 1-BUY rating on DSC and a price target of $34. The report heading says "Dec. Qtr. on target - No slow down here". It also says that the big surprise to all the analysts was the strong growth in iMTN that no one expected. Read and enjoy! lehman.com

To: OldAIMGuy who wrote (3521)	1/31/1998 2:47:00 AM
From: Ben Beale	Respond to of 4429

To All- CEO Donald mentioned Tuesday the effect of "dillution" due a required method of accounting for stock options left over from the Celcore purchase. From the article below, it looks like this accounting change hit DIGI, Big Blue, and lots of others.... r/s Ben --------------- "Harry Truman once quipped that he only wanted to work with one-armed economists. That way, he reasoned, they couldn't fudge things by saying: 'On the other hand...' Investors are looking for the same thing in accountants this earnings season. Like Truman's economists, company accountants and Wall Street analysts are coming up with two different versions of that all-important measure of company performance -- earnings per share. The situation -- caused by a new change in accounting rules -- is causing a lot of confusion this month over whether companies are meeting or beating expectations. As a result, companies can get punished when they actually did pretty well, and vice versa. Keep three things in mind. First, this will be the last quarter that you have to deal with the problem - by next quarter, analysts and companies should all be on the same page. Second, if you are judging companies on the basis of how they measure up to expectations, be very careful: The numbers this quarter may not be what they appear to be. Third, the change in accounting rules is actually a good thing. It means that from now on, when U.S. companies calculate earnings per share, they will be taking into account things like options, warrants and convertible bonds. These types of securities can be converted into stock ... and lower a company's earnings per share. The new 'diluted' numbers give investors the best look they have ever had at the real earnings per share. It includes all of what is out there in terms of who may convert options. Still, it's a new system, and it's causing a good deal of confusion this quarter. Under the old rules, which changed last December 15, companies could often ignore instruments that could be converted into shares when calculating earnings per share. The rules said that if considering all the options, warrants and convertible bonds to be actual shares did not dilute earnings per share by more than 3%, then you could just pretend those things did not exist. This change caused confusion this week over IBM's earnings. Most investors, not to mention earnings tracking services like First Call and IBES, thought Wall Street analysts were using diluted earnings when those analysts came up with their consensus estimate of $2.15 a share for IBM, for the fourth quarter of last year. So when IBM reported $2.11 diluted earnings and $2.16 basic earnings (a higher number because it excluded options), it looked like the company missed consensus estimates. It turns out, though, that the analysts were really reporting basic earnings when they made estimates. So IBM really beat the consensus by one cent, or $2.16 to $2.15. IBM shares traded down after the announcement, in part because of this confusion. What's worse, the snafu is likely to happen again during this earnings season. That's because no one has really gone through to check all the analysts' estimates to see if they are based on diluted or basic earnings. Here's why the chances are good that there are more surprises out there. Given that there are about 3,000 analysts reporting on about 6,000 companies, it would simply be too time consuming for the services like First Call and IBES to find other exceptions, especially in the midst of busy earnings reporting season, when analysts don't have much free time to explain things to them. First Call said: "The brokerage firms told us the numbers were diluted, but it turned out that for IBM they were basic. We would not rule out further misunderstandings.""