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

To: SirAlexx who wrote (2213)	2/22/1998 3:50:00 PM
From: John McCarthy	Read Replies (2) \| Respond to of 3506

Thread ...... Recent SSR comments on TRMB. Based on a discussion with CFO Dennis Ing after the earnings report, SSR is lowering its fiscal 98 estimates by $0.10 per share to $0.85 per share. The first quarter will be WEAK because Trimble's big sales conference has been moved to the first quarter. GROSS MARGINS will not be as strong as expected because there will probably be no software sales this quarter, and SG&A expenses will be higher because of year-end bonuses. This now marks the third consequtive quarter that Trimble will miss SSR's estimates. Also troubling is the fact that RED CHIP REVIEW has an unrealistic earnings estimate for fiscal 1998. Based on SSR's conversation with management, there is no way Trimble is going to make $1.14 per share this year. A downward revision of estimates to $0.85 per share will not look good. Some comments on my part ..... (1) I was unaware that SOFTWARE plays such an important role in Product Sales - as a % of the total mix of sales, and that its particuliar GM% was so much higher then other TRMB high end product's GM%. (2) In my opinion, TRMB's accounting for bonuses is highly unusual. Most companies book an accrual at Year End for this expense. They do NOT carry the expense into the next year. They do ADJUST their accrual up or down the next year. What year the actual payout comes does not matter. (3) It does make sense, given what I take to be as a National Sales meeting in the 1st quarter that there would be a hit to the G&A line. Regards, John McCarthy