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Technology Stocks : Creative Labs (CREAF) -- Ignore unavailable to you. Want to Upgrade?

To: jjs_ynot who wrote (11631)	6/12/1998 12:38:00 AM
From: Doug Fowler	Respond to of 13925

Has anyone run the profit expectation given a 10 percent shortfall in revenues and a gross margin drop of 5 percent ? I am guessing they'll come in at around 20 cents a share. I am really BAFFLED by the CEO stating that they have not changed next year's forecast. Less than three months ago, they predicted that revenues for this quarter would be 10 percent higher than they are now forecasting, and they did not indicate reduced margins. If the company can't forecast three months in advance, why should we be gullible enough to believe that they can forecast 6 or 12 months out. If the low end is killing them now, that is going to have negative reverberations at the high end, i.e., pricing pressures there. Forget 20 to 25 percent growth for next year. No way, no how. In my opinion, this company is going to STRUGGLE to achieve zero percent growth in the next 12 months. If anyone needs an analogy, one only need look at the disk drive makers. Many thought their woes were "transitory" six or nine months ago. In every case I can think of with the stocks I have followed over the past several years, when a company disappoints one quarter, it disappoints for at least a few more quarters, if not for several years. (Macromedia, Shiva, Business Objects, 3COM, the disk drive makers, etc.) And in just about every case, they called the first disappointment temporary. Don't buy it from Creative. The CEO should be ousted for attempting to push this one over on us. A turn-around is going to take a long time, and it may never happen. Creative's best hope for the short-term is to get a buyout offer. (THAT saved US Robotics last year.)