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Sapient Corp. Message Board

  • bardonow bardonow Jan 11, 2007 9:20 AM Flag


    Margins getting bigger. Many Cos. with options probes going on, it's not holding AAPL back is it?

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    • got_screwed_by_internet got_screwed_by_internet Jan 11, 2007 10:12 AM Flag

      well, that's a little misleading of a heading... listened to bits and pieces of the earnings call and have the following thoughts:

      1) interesting that they revised Q2 down - 2 cents a share downwards. am now leary that since what was reported yesterday was "preliminary" that Q3 and Q4 are still in potential flux.

      2) 1.5MM charge for accreual of bonus. on the call, they stated that they don't expect to have to do this in the future. sounds to me that they were hemmoraging and have a lot of unhappy employees and therefore they had to pay out meaningful bonuses otherwise they would suffer. essentially, impacts profitability by a penny a share. while turnover appeared to be "better", it seems somewhat artificial in that they took a charge to lower it.

      3) good news that they sold a new contract that they touted as a 75MM or so. problem i have is that they continue to sell such huge projects and it doesn't seem to be showing on their top line and bottom line. further, herrick stated that they would not need to increasing their hiring engine and that they would be able to handle it through the normal processes - tells me that while this is a big contract, it is spread over a number of years and is only "potentially" that large.

      4) they stated that they expect margins to get better in Q4 but would not give any indication of what this meant.

      5) the new CFO needs to stop staying "um" so much. sorry, but just seems so... amateur...

      6) profitability seems quite problematic. you can see numerous headlines saying "Sapient 3Q Profit Drops As Expenses Rise" let's be clear her on the results:

      "Analysts, on average, estimated earnings at 4 cents per share on sales of $102.2 million, according to a poll by Thomson Financial."


      "Sapient earned $100,000, or breakeven per share, down from $6.3 million, or 5 cents per share, during the same period a year ago."

      so, they missed earnings by 4 cents but exceeded on top line.

      "On a GAAP basis, Sapient reported a third quarter loss from operations of $1.2 million, compared to income from operations of $6.2 million in the third quarter of 2005."

      the earnings estimates are based on GAAP. They confuse people on the press release with the non-GAPP nonsense saying that they had a 7 cent earnings. while it can be compared to last year... the number to compare to the analyst expectations is 0 cents vs 4 cent expectation.

      7) "Cash, cash equivalents and marketable securities totaled $105.6 million at September 30" - seems like things improved in the 3Q in the cash position. keep in mind that they still have 127MM shares or so outstanding... but, nevertheless, a positive.

      8) Comparing this to AAPL, is rediculous. They did their internal probe and found 2 people that they are holding accountable. Steve Jobs was cleared and their board stands by him. Jerry and Sue were not cleared and the board did not stand by them. BIG difference here... also, AAPL has been a lot more open about the POTENTIAL financial impacts while SAPE continues to state that they are evaluating.