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Technology Stocks : C-Cube -- Ignore unavailable to you. Want to Upgrade?

To: Daniel Simon who wrote (29681)	2/19/1998 3:23:00 PM
From: Helios	Read Replies (2) \| Respond to of 50808

<<How come it takes approx 1.5 million shares for CUBE to trade up a point but only about .25 million to trade down a half point?>> Looks like some big holders have lost faith and are using any rally to unload their shares. Problems in China still loom over this stock.

To: Daniel Simon who wrote (29681)	2/19/1998 4:34:00 PM
From: John Rieman	Read Replies (2) \| Respond to of 50808

Q1 and Q2 earnings concerns...................... VCD ASPs were about $12 in Q4, 1997, they will drop to around $10 in Q1. C-Cube needs to sell 4.2M units this Q to break even. Last Q was around 3.5M units. The last two years, we have seen a nasty drop in demand that starts in March or late April. If demand runs through the end of March this year, C-Cube can do 4.2M units, if not, VCD revenues decline. They almost certainly will in Q2. Divicom's headend business is flat this Q. Settop boxes won't add in Q1. No Kirch sales. DVD revenues should be up, maybe double over Q4. Add $4M. DVx is replacing older encoder chip sales. DVx is much cheaper. It will take a 50% increase in units to make up for the lower prices. Not happening this Q. A decrease in encoder chip revenues. Gross margins will increase from 53% to over 54% this Q, and spending is still constrained. This should add a little to ESP. C-Cube's tax rate is moving down from 34% to 30% this year, don't expect it all in one Q. A 30% tax rate would have added $.05 per share more earning in 1997. All-in-all, I see $92M to $94 in revenues in Q1, if VCD runs out the Q. $.33+ EPS.