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Strategies & Market Trends : Market Gems:Stocks w/Strong Earnings and High Tech. Rank -- Ignore unavailable to you. Want to Upgrade?

To: cyberman who wrote (17584)	10/27/1998 12:16:00 AM
From: Baghul	Respond to of 120523

CNWK looks good for tomorrow. The internet stocks are rising again. THNK, ONSL among others looking good for tomorrow. If AOL reports a blow out quarter watch out. The momentum with be good for a few days. Do visit my new thread at your convenience Subject 22842

To: cyberman who wrote (17584)	10/27/1998 12:37:00 AM
From: Shane Venem	Respond to of 120523

Careful with CNWK. They seem to be pulling every rabbit out of their top hat to make their numbers look good. Briefing.com called em on the number fudging today: CNET (CNWK) 44 1/4 +5 1/4 What is it with Internet companies and earnings reports? The industry is littered with examples of companies that "spin" their earnings, including Netscape (NSCP), Excite (XCIT), Amazon.com (AMZN), and now, for a second straight quarter -- CNET (CNWK). CNET reported diluted earnings per share of $0.21 for Q3, far above the First Call estimate of -$0.12. We were immediately reminded of the Q2 report, in which CNET reported a $0.02 profit relative to expectations of a $0.21 loss. As it turned out, the Q2 profit included a $0.28 gain on the sale of securities, a one time gain which analysts all agreed should have been excluded. This quarter's report includes another gain on the sale of securities (in the same company -- Vignette Corporation). If that gain is excluded, it looks as if CNET lost $0.09-0.11 per share (we looked at it two different ways as the report does not make clear the tax implications of excluding the gain), roughly in line with expectations. Another confusing aspect is that CNET provides an operating number of a $0.06 per share profit, which does exclude the above mentioned gain, but it also excludes a loss related to its Snap! joint venture with NBC. Unlike the sale of securities, the Snap! loss is not a one-time extraordinary event and it should be included. Taking it from this angle, and adding the Snap! loss back in to what CNWK would have us believe is an operating profit of 6 cents also puts true the true operating number at a loss of 9 to 11 cents. Figures being thrown about are: $0.21 profit counting everything, $0.06 share profit excluding one-time gain and excluding Snap! loss; $0.09 to $0.11 loss excluding one-time gain and counting Snap! loss. Briefing.com takes the last figure as the true operating net, but we would not be surprised to see many journalists report the "operating" gain of 6 cents, making a quick assumption that the 21 cents number has then been properly adjusted for the securities gain. It has, but that doesn't make it accurate, because the Snap! loss is then inexplicably excluded. The bottom line is that CNET has gone to great lengths to sell itself as one of the few Internet plays that is turning a profit, but once its Vignette stock is gone, those profits will be gone too, and there is no justification for excluding the ongoing operations at Snap! Most disconcerting is CNWK's inability to provide a more accurate view of its bottom line, which is becoming an all too common theme in the Internet world. Also a story at ZD: zdii.com