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Technology Stocks : Network Associates (NET) -- Ignore unavailable to you. Want to Upgrade?

To: mrknowitall who wrote (4380)	3/19/1999 11:16:00 AM
From: VINCENT MALGAPO	Read Replies (2) \| Respond to of 6021

Found this on yahoo: Merrill's morning notes by: hd99glide (37/M) 4496 of 4496 Analyst indicates NETA management did return call late yesterday. 2 weeks til news on SEC ruling; in 'quiet period' so no comment on current business. Next bullet point says "Company management noted that they are not changing their indications on 1Q 99 business trends. We are looking for revenues of $286 mm (+30%) and EPS of $0.47 (+61%) before amortization" Posted: Mar 19 1999 11:10AM EST as a reply to: Msg 4486 by Finderkeeperwins

To: mrknowitall who wrote (4380)	3/19/1999 11:31:00 AM
From: Just_Observing	Read Replies (2) \| Respond to of 6021

NETA will have a hard time closing this quarter Apparently NETA sells each quarter as 25, 25, & 50. This quarter the second month is 2 days short so even more gets shifted into the 3rd month. When buyers see that a company is in trouble, they hold out for large discounts. I have seen this happen several times with NETA's competitors. The temptation is for NETA to give in. But this will make the next quarter worse. During the last quarter, NETA was probably rescued by the Remote Explorer Virus scare that came with about 8 days left in the quarter. Yet their DSOs went up to 89 days from 84 days the previous quarter. They had made 240 million the Sept quarter and 272 million in the December quarter. This quarter revenue expectations are from 285 to 287 million and management guidance is for 95 days. The scary part is that the Robertson Stephens analyst expects the DSOs to come in higher than what the management has been predicting. On top of it, NETA finds itself in an upgrade cycle as new products are slated for the next quarter. All these factors will probably combine to cause NETA to miss the revenue number. If they miss the revenue number, the earnings number will miss by a much larger fraction. I hope that I am wrong but the street seems to suggest otherwise. For reference about DSOs, please note that SYMC, who competes with NETA, has DSOs of only 34 days last quarter. Of course, SYMC's Corporate sales are only 39.3% of the total compared to around 75 - 90% for NETA (Bill Larson has not given this fraction in any of the last 4 or 5 conference calls). If Bill Larson can pull out 285 million in revenues this quarter with DSOs of 95 days or lower, he should have his own show in Vegas.