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Quantum Corporation Message Board

  • hageneriksson hageneriksson Jan 13, 2014 6:18 PM Flag

    can't remember when revenues and profits actually came in ABOVE management's original expectations last time

    in fact the company has become somewhat infamous for its constant string of overpromising and underdelivering over the last few years but the latest restructuring actions seem to bear some very nice looking fruits finally.

    And while revenues will still be down 8.5% yoy profitability will come in BETTER than last year at around 0.026 (vs. 0.02 last year) so clearly the company has made progress on the margin side (though mostly by taking out costs of the still shrinking business)

    management projected further cost cutting measures today which altogether will enhance the company's profitability by another 6 Cents for the rest of 2014 so at least the consensus eps estimates (currently at $0.06 for FY14) seem way too low now.

    Revenue projections for FY14 currently stand at $545 mln and at only $528 mln for FY15 which looks somewhat pessimistic given the outperformance in Q3. And while there's always some kind of budget flush in Q3 the company hasn't beaten its own projections for this quarter for quite some time now.

    Due to the constant disappointments expectations have become very low for the company as evidenced by the weak analyst estimates and the depressed share price. And while the business is still in decline there might be some light at the end of tunnel now.

    The company clearly is worth a look below $1.50 especially if management will be able to finally stabilize revenues going forward. We will hear about this on the upcoming conference call I guess.

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    • so more of the same at QTM now that the conference call has taken place - revenues are going to decline another 14% for Q1 while gross margins will hold up from Q4. Given that revenues do not show any signs of stabilizing I wouldn't commit new money at this point - shares look cheap but actually they are cheap for a pretty good reason.

      • 1 Reply to hageneriksson
      • If you look at the Needham conference materials on the QTM web site you will see a chart that shows market segment breakdowns. The chart shows that QTM's largest segment, tape at ~65%, declining and disk-based appliance not growing that much. So I think revenue stabilizing is going to be difficult and the past bears that out.
        I'm still stuck on 200M shares outstanding with lowering revenue and not much profit yet and debt that almost equals # of shares outstanding. How do you increase share price and keep the price up under those conditions. Maybe I'm making to much of this?

    • already earned an upgrade by Craig Hallum this morning - price target raised to $2.50

      stock is already trading up close to $1.50 in pre-market - wouldn't chase the stock at these levels

 
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