Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : HDCO - Why sudden dip? -- Ignore unavailable to you. Want to Upgrade?

To: kolo55 who wrote (564)	5/18/1999 9:15:00 PM
From: rich evans	Read Replies (1) \| Respond to of 572

Hdco had a positive earnings report and cc.Andy used such words as agressively optimistic. CPQ sales dropped substantially but expect them to return. See sales flat for Q3 and Q4 at a minimum with good chance for growth if CPQ and other ECM/OEM forecasts turn out. Gross margins at 15% and see heading up to 17% becasue of improvements in the East Coast Q/T facility finally and Malaysia which is now breakeven and turning profitable with about 45 mill in revs and general improvements everywhere including the Pheonix innerlayer facility which was a problem. Next year should see at least 15% growth and higher margins. Operating expenses should be go down in the 80- 84 mill range for the year .ASPs were flat so Taiwanese competition less.This was a pleasant surprise. Top 5 customers are SLR,CLS. SCI. CISCo and LUC. Lost a VAM customer which means one quarter of down VAM rev of about 5% in VAM.All in all if you run the numbers and margins discussed and have confidence in ECM who are the major customers, then HDCO should have some major improvments earningswise. Their tax rate is high however at 39% and interest about 7 mill a quarter but they are paying debt down 20 -25 mill a quarter. Still they are in the ECM /OEM food chain and should finally get some benefits. They confirmed $1.50 for 99 but analysts estimates for 2000 look low to me. Oh well the "forever optimist." Anyway I expect the stock to go up tomorrow. Rich