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

To: Derrick Lim Kok Fang who wrote (11931)	8/6/1998 2:42:00 AM
From: Richard Haugland	Respond to of 13925

I respectfully disagree with your assessment of the Singapore Business News Article, especially the following paragraph: A BT poll of five analysts yielded an average Q4 earnings per share forecast of 23.7 US cents, down from 55 US cents in the fourth quarter ended June 1997. They expect full-year earnings per share to fall by an average of 3.4 per cent to US$1.77. This compares with Wall Street analysts' predictions of 17 US cents for the quarter, according to Zack's Investment Research. The Estimate Directory,which collects Singapore dollar estimates, has a consensus forecast of a 9 per cent rise in net profit to S$259.6 million. If CREAF really makes 23.7 US cents tomorrow and the Zacks estimate is 17 cents, IMHO the stock will fly (upwards) on Friday. Although, as the article reports, this is a "57% plunge in fourth-quarter earnings" CREAF has had over a 57% plunge from its more lofty days above $25, which were not so long ago. At a ttm P/E of 6, I would not see the stock retreating further if in announces earnings up beyond projections with its stronger quarters coming. Of course stock prices are not based on ttm but the future, so who knows. Also, if CREAF net profit goes up 9% and EPS down 3.4% the number of shares must have increased >10%. The latest number I have seen was 89.520 million shares at the end of last quarter versus 90.793 million at the end the last FY so this is also inconsistent. I also don't understand this: They expect full-year earnings per share to fall by an average of 3.4 per cent to US$1.77. According to Zacks, CREAF has already earned $1.82 for the year in three quarters. Where do they get the $1.77? That would be negative 5 cents for the quarter rather than their number of 23.7 cents US. Maybe there are charges built in somewhere. The projection of Zacks of 17 cents is consistent with their projection of $2.00 US for the year. Incidentally Zacks also projects $2.46 for next year for CREAF and 53 cents for next quarter! Even if CREAF DID make $1.77 for the year, their ttm P/E would be <7! Overall I hope that the Singapore Business News's projection of 23.7 cents (or higher) is correct and that the BT analysts have good insider information. Note: According to Zacks, CREAF has beaten the street's earnings estimate for at least the most recent 5 quarters.