To: thebeach who wrote (14281 ) 5/26/1998 7:19:00 PM From: Gerald Walls Read Replies (1) | Respond to
Netscape just reported a break even earnings report. Netscape Communications (NSCP) --UPDATE--: Netscape just ran a clinic in how not to report earnings. In what has to be the worst attempt at concealing a lousy quarter in recent memory, NSCP lumped a quarter's worth of losses into a black hole called January, and used the sale of securities to eke out a breakeven figure for the February-April quarter. As our earlier comment noted, Netscape took advantage of a shift in their reporting schedule to dump losses into January. In the conference call, Chief Administrative Officer Peter Currie ducked questions about January three times. He at first said that January was slow because it was the beginning of the quarter, then later said that "we just didn't get much done" because people were worried about layoffs. If you're going to play games with the numbers, at least be ready for the questions. Even after dumping a $0.58 per share loss into January, Netscape still couldn't post a legitimate breakeven number for Feb-Apr. The company reported a $10.1 mln operating loss in Q2, but an $8 mln sale of unnamed securities helped take the final number up to breakeven. The bottom line on Netscape: the company lost $0.58 in Jan-Apr, which included both a $12 mln restructuring charge in January and the $8 mln securities sale in Feb-Apr. Though no per share figure was given excluding these items, it would be in the $0.53 area and would still be far worse than Wall Street expectations of a $0.10 loss. Forget the comparison of -$0.10 with breakeven -- that's a mirage. The first four months of 1998 were lousy for Netscape, and what's worse is that they tried to make the market believe that they were great. Let's hope that the company doesn't believe it's own spin. As for that 1/4 point gain in after-hours, we suspect that it will be a very different story tomorrow. For more on Netscape, check out the Stock Brief later tonight.
