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

To: Brian Lempel who wrote (11954)	8/6/1998 10:11:00 PM
From: Marc	Read Replies (2) \| Respond to of 13925

That does not look good!! 08/06 9:50P +Singapore's Creative Dn 6% To S$18.80 On Earnings let-Down MORE) DOW JONES NEWS 08 -06 -98 09:50 PM SINGAPORE (Dow Jones)--Shares of Singapore's multimedia peripherals maker Creative Technology Ltd. (CREAF) have tumbled 7%, or S$1.40, to S$18.60 on its disappointing earnings unveiled earlier Friday, market observers said. The market is punishing Creative for the poor showing,' said Terence Khoo, analyst at Vickers Ballas Investment Research. Creative said its earnings per share for the fourth quarter ended June 30 plunged to US$0.05 compared with US$0.55 the same period a year earlier. "That was way off,' said Khoo, adding that he had expected an earnings per share of US$0.26. Creative said net income in the fourth quarter fell 91% to US$4.8 million from US$51.2 million a year earlier, after a one time write-off of US$8.3 million related to the cessation of certain activities. Excluding the item, net income was $13.1 million, or US$0.14 a share. (MORE) DOW JONES NEWS 08 -06 -98 09:54 PM

To: Brian Lempel who wrote (11954)	8/6/1998 10:28:00 PM
From: Fred Fahmy	Read Replies (1) \| Respond to of 13925

Brian, Personally, I liked most of what I heard. IMO, CREAF is executing relatively well in a very tough environment. Until, I see otherwise I am going to continue to assume that this was indeed a transition quarter and that with a high end audio cards back in the mix, earnings momentum will turn north. Did you catch the part about inventory getting in line? Earlier they had stated that they thought it would take a few quarters to get inventory back to a desirable level. Apparently, they were able to get there in just one quarter. Turns were also up. Cash continues to flow in and the balance sheet looks great. Contribution from video products (mostly high end) is growing rapidly. In fact, I think we can assume had it not been for significant growth in this area....CREAF would have been hard pressed to post a profit. When sound cards returning to the scene as you pointed out ("Audio, currently at 34.4% of revenue, is expected to represent 40% next quarter."), things should start looking up. As they pointed out more than once, they can not control macro economic issues, but from a product line perspective, the company has never looked better. I think we will have a very good idea of where the company and stock are heading within the next six months. I did like someone's suggestion on this forum, I believe, of consolidating the industry. IMO, this would be a great use of cash. Heck they could just about buy TDFX and DIMD outright with their cash stash. It's also a shame that they can't use some of that stash to pick up their own shares at a bargain basement price tomorrow (if the market acts irrational and tanks CREAF further). CREAF's financials and the current valuation just don't add up. These kind of disparities don't last forever. Something will give eventually. Either fundamentals will weaken dramatically to justify such a low valuation. Or the valuation will increase to catch up to the fundamentals. Heck, the trailing P/E (including what should be the trough quarter) could easily be less than 5....and all this time they are still making money and generating good cash. Oh well....we'll see......like I said, six months should tell a lot. Good luck, FF

To: Brian Lempel who wrote (11954)	8/6/1998 10:28:00 PM
From: Jeff Lins	Respond to of 13925

New to the thread and SI...Long at 19.5 (ouch) Tomorrow...who knows!Looks like earnings were a bit worse than expected and revenues were on target. Virtually everything points to a better year to come. I have to think that most of the bad news is factored into the current price. But...I have seen many smaller cap companies go under book value. On the positive side, we have tons of cash, and are quite profitable. If they ever get the approval for the buyback, looks like they will get more shares for the buck! Biggest factor tomorrow is market movement. Nas did well today. Using recent history, I am guessing we drop 25-30 pts on the Nas tomorrow. This will not help. In any event, I think movement will be small in either direction- half pointish. Hoping it is in black... How is this for an idea...spend the whole 400M on stock buyback, pick up about 30-40M shares :) Then we can get earnings to 4 bux a share! Then again, looks like most of our recent earnings are interest :P Jeff