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Datalink Corporation Message Board

  • carp_slayer carp_slayer Feb 14, 2013 5:14 PM Flag

    Q4 Beat, Positive Outlook

    Growth in customer base and backlog, demand is back.

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    • while the overall quarter was quite good and management commentary about accelerating sales cycles and record backlog is very encouraging there are some flies in the oinment here:

      1.
      StraTech acquisition doesn't live up to expectations so far with revenues coming in way below plan - management blaming disruptions from the takeover for that - time will tell how this will work out
      2.
      margins have come down signifcantly also this was partly due to a big low margin resale of VMWare licenses
      3.
      eps guidance for Q1 implies additional margin pressures

      Bottom line:
      Good quarter, encouraging management comments. Company needs to improve margins and integration of the latest acquisition going forward.

      As expectations were very low after two quarters of disappointments going into the earnings release numbers and guidance should be enough to give the stock a sizeable boost tomorrow, perhaps as much as 20% at the highs. As margins going forward look still weak I would look to take some profits tomorrow.

 
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