I've been running some scenarios on the company and the IR guy is probably right that the losses will continue into next year. The final quarter ending in Jan 1999 will probably be as good as it gets for a couple of quarters. I project a loss of 4-5 cents per share, widening temporarily to 9-10 cents or more in the traditionally weak first quarter.
Keep in mind that these are very rough estimates. It would certainly be useful to check some of my assumptions with the company.
I think the potential problem about receivables may run deeper than your explanation, although that probably accounts for part of the discrepancy. Looking back on previous quarters, receivables have continually run substantially higher than total revenues, peaking at almost 1.5 times revenues in the first quarter of the current fiscal year. We still have some explaining to do. For this, we need to understand when the company books revenues and how it handles returns.
Steve |
