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Technology Stocks : Thrustmaster (NASDAQ:TMSR) -- Ignore unavailable to you. Want to Upgrade?

To: esecurities(tm) who wrote (1437)	4/4/1998 6:03:00 AM
From: Joe Btfsplk	Read Replies (2) \| Respond to of 2443

Shares of Thrustmaster Inc. (TMSR) nose-dived nearly 27% Friday after the company stunned Wall Street ........ "It's a huge surprise," said Alan Davis, an analyst with the Red Chip Review. The company.....cited many reasons for the shortfall, including a higher than expected merchandise return rate and the failure of a number of expected significant orders to materialize late in the quarter. Difficulties in the design and manufacturing of the company's Formula 1 Racing wheel also hurt results. .....involved wiring problems that led to a button not functioning on the steering wheel, have been addressed. "Corrections have been made and we believe the product problems have been solved," he said Friday. Revenue for the first quarter at Thrustmaster will be flat .......Excluding the high level of returns, revenue would have increased 17%, Aanderud said. Analysts said the lack of revenue growth is a concern, but Davis said the main worry is the high number of returns, which could result in a slight hit to second-quarter results if they don't slow soon. Normally, returns taper after mid-February, but the company hasn't seen a slowdown. "I do expect it to curtail," Aanderud said. He just can't predict when. The company said in its announcement Thursday that it was "analyzing" reasons for the returns. It pointed to the development of a retail channel whose customers return products at higher rates than they've historically experienced. That channel includes Warehouse Clubs, which has a higher return rate than some other retailers because the consumer may not be as technically savvy, one analyst said. Also, the firm's Millenium 3D Inceptor Joystick product, introduced in 1997, had higher than average return rates. Davis said the product may be discontinued, as it caters to what may be too much of a niche market. But Aanderud, who acknowledged that acceptance of the product hasn't been as good as the company expected, said the company will continue to sell the product. He did say, however, that there have been price cuts. Despite retailers clamping down in the first quarter to control inventory, new orders in the quarter were up about 35%, Aanderud said. He added the company hasn't lost any market share and believes it is gaining market share. Later this year, Thrustmaster will enter the next-generation console market, unveiling new products in May and shipping them in the fall. The fourth quarter is the true test for a company like Thrustmaster, analysts said, as most of the company's revenue is produced then.