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Tuesday, April 28, 1998 Monday, Iomega closed at $8 1/4, down $3/8 (-4.35%) TODAY'S RECAP: A hectic day on Wall Street yesterday made for a mighty quiet message board -- those who did tear themselves away from various stock tickers benefitted from the following posts on EPS estimates, Zip rebates, market share, and the ongoing battle between the Zip and LS-120/Superdisk. Enjoy! INDEX: Use the Search or Find feature of your word processor to locate the article number (Find: 1++, 3++, etc.) - or use AOL's Edit>>Find in Top Window Feature. If Find in Top Window is dimmed, just click on some text, anything, in the IOM Today window and try again.
1++ HRPlbg talks about 1998 EPS estimates
Recap written and posts compiled by TMF
Weekly. _______________________________ And now, the Best of the Board...Started 9:00pm ET 4/26/98. 1+++++++++++++++++++++++++++
Subject: 1998 EPS estimates Thanks to Ken for posting the information from Zacks concerning recent earnings revisions. I haven't seen much comment so I thought I'd start and see if we could get some discussion going about the future EPS and revenues. Jun-98 Sep-98 Dec-98 FY98 h&q -$0.01 $0.00 $0.10 $0.02 need -$0.04 $0.00 $0.07 -$0.04 buck -$0.02 $0.02 $0.08 $0.01 I would like to look at the "Candy Quarter" Dec-98. Traditionally the best quarter of the year. How will IOM end up making only $0.07 to $0.10? The quarter ending Dec-97 IOM made $0.14. Why such a big drop off from prior year? That's a 28%-50% drop in eps. Lower revenue? Surely not. Not if we are to consider IOM a growth company. Lower Gross margin? My guess yes. Somewhere between the 33% of 4th qtr 97 and the very low 25% of 1st qtr 98. I sure hope by the 4th quarter they are able to rebuild the GM percentage. Maybe not to 33% but to the higher 20's. SG&A anybodys guess. If they get this under control it could be very positive for the bottom line. I certainly don't expect it to be a greater percentage of revenue than what it was during the 4th 97 (19%). I'm actually looking more like 18% as they improve in this area. R&D should stay flat at 23M. So what's the point of all this? I keep coming up with only one answer. Revenue for the 4th qtr 98 will be relatively flat with 4th qtr. 97. Anyone else see a way that revenue for 4th 98 not being relatively flat with 4th qtr. 97? How do we explain these low estimates? 2+++++++++++++++++++++++++++
Subject: Re: $50 Zip rebate at CompUSA << There has been no announcement from Iomega about any rebate like the above. It is most likely a CompUSA rebate and not Iomega. CompUSA seems to do this quite often. >> Whoever's responsible, it's working. A colleague I've been urging to buy a Zip for two years bought his yesterday. ``For 80 bucks, how could I say no?'' he said. Almost any computer user can see spending that much just to see if it's worth it. You're only out 80 bucks even if you hate it. If it's CompUSA only now, I'd like to see Iomega itself do a nationwide rebate on Zips and Jaz right before Sony breaks out its new drive. Let's say Sony brings out its 200mg drive for $100, somehow. How would they compete with an $80 Zip drive with an installed base of 14-15 million--or with a 1-Gig Jaz at, say, $225 (which would also take care of SparQ, I think) if their selling point is going to be the capacity of the disk. The heck with margins and earnings growth for the time being: Market share is everything. If Iomega doesn't keep that, there won't be any margins or earnings to worry about. 3+++++++++++++++++++++++++++
Subject: LS-120 vs ZIP review. Great article on this topic. Thanks for posting the site Dave (WaveRunner) TechSearch - Iomega vs. Imation: Drive Rivalry Heats Up As Fujitsu Adds Zip to Its Line MY THOUGHTS - FWIW The laptop area is important and IOM has the lead even though I was surprised that they shipped 2 million LS 120 units. This does not mean, that they have sold that many to the end consumer since OEM sales register earlier. Keep in mind that most people need to transfer the data back and forth with the desk top units as well as other people. This requires them to have the same format and Iomega is clearly ahead of the game here and pressing hard with the current media blitz. Iomega has additional products in the pipeline like the "Buz", "Jaz", and "Clik" products. These continue to strenghten the IOM name and should help provide strength for the ZIP wars as well. What elst does Imation have in store besides the LS-120? Pretty soon the need to be backwards compatible will fade. Previous mentions have pegged the date as 2001 when more people will be using ZIP type medium instead of todays 1.44MB floppies. It seems the featureof the LS-120's backward's compatibility will decrease over time. And as for time..... it will decide the true fate of this war. Is it VHS or Beta. Is it the 5-1/4 " floppy or the 3-1/2 . Is it Zip or OTHER?? Either way Iomega is an exciting company with a lot in store for the CLIK drive if it takes off as planned. Good Luck. _______________________________
End Report. Posts covered through 9:00pm ET 4/27/98
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