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To: Sandra who wrote (588)	7/22/1998 5:47:00 PM
From: j g cordes	Read Replies (1) \| Respond to of 119973

EGHT's better than it looks.. the numbers should be picked apart because the -.27 (which is 2 cents less than estimates) has two components. The semiconductor side didn't do as well as expected but then few in the semi sector have. On the other hand product revenues were up nicely. They've entered into full production finally on the desktop phone which as expected should blip inventories from test production levels. Non-recurring liscense and royalties were just that.. non-recurring and expected. The high one time royalty payments from 97 distort the current picture and should only be seen as a one time benefit to the company, not a quarterly expectation. EGHT has done something few semi companies have done, they've expanded into products that use their own technology while continuing to be a chip merchant. In this they are creating stability and opportunity through diversity. EGHT has accelerated its efforts in this area and done well in my opinion... "said Paul Voois, chairman and CEO. ''We continue to build our systems business. Unit sales of ViaTV videophones grew more than 40% sequentially over the previous quarter, with the growth split between our direct and retail channels. We entered volume production of the VC150 desktop videophone, which has a built-in camera and LCD display. We targeted a new market by introducing the RSM-1500 remote surveillance module, which allows anyone within reach of a touch-tone telephone to monitor any location anywhere in the world.'' Revenues in this area have jumped from 14% to 48%. Summary... analysts got it wrong on the semiconductor sales side, but they've been missing that number all along and even Kurlak warned that other semi's aren't looking forward to good demand for another 6 months. With their new products EGHT seems to be doing very well in a business they control outside the vulnerabilities of Asia, something few chip makers have had the gumption to do.... indeed even Japan has signed up for some reselling. Nice to see an American company exporting technology and product. Looks to me like a good buy here or on any dip from this mistaken consensus on earnings. --------------- From the report: "License and other revenues for the quarter were $0.6 million compared to $6.7 million for the same period of fiscal 1998. The latter amount includes a one-time $5.3 million license to a single customer. Total revenue for the quarter was divided among visual communication semiconductors (44%), videophone systems (48%) and nonrecurring license, royalty and other revenue (8%). In the first quarter of fiscal 1998 total revenues were divided among visual communication semiconductors (28%), videophone systems (14%) and nonrecurring license, royalty and other revenue (58%). ''Semiconductor sales were reduced this quarter following initial production orders to a few major customers in previous quarters,'' said Paul Voois, chairman and CEO. ''We continue to build our systems business. Unit sales of ViaTV videophones grew more than 40% sequentially over the previous quarter, with the growth split between our direct and retail channels. We entered volume production of the VC150 desktop videophone, which has a built-in camera and LCD display. We targeted a new market by introducing the RSM-1500 remote surveillance module, which allows anyone within reach of a touch-tone telephone to monitor any location anywhere in the world.'' Full biz.yahoo.com Jim