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Electronic Arts Inc. (ERTS) Message Board

dansmith46 63 posts  |  Last Activity: Apr 15, 2014 10:19 PM Member since: Jan 10, 2012
  • Reply to

    Drapkin of CAS will be on CNBC ASAP....

    by vipinkot47 Feb 12, 2014 10:11 AM dansmith46 Feb 12, 2014 12:11 PM Flag

    That's not how accounting works. Cutting Cappex will help free cash flow but not earnings. Only operational revenue and costs are counted in earnings and the EPS number, and cappex goes in the investment category.

    Learn some accounting my friend

  • by dansmith46 Feb 11, 2014 5:41 PM Flag

    This is exactly what I have been posting about. I wanted them to stop the capital spending and focus on paying down debt, AND I wanted them to shut of Wabush. both of which add tremendously to free cash flow. Each $100 million they pay down in debt will increase annual EPS by about 3.4 cents per share. The more debt they pay down the faster these repayments can accelerate too. They're paying about $1 in EPS every year in interest expense. I for one and happy about these changes. It means less cash being sunk into a project we all know is a failure. They overpaid for the project and sunk a lot of cash into it after wards too. If we could go back in time and stop it that would be great, but we can't and this is the best option going forward. It frees up about $400 million a year to pay off debt.

  • by dansmith46 Feb 6, 2014 4:49 PM Flag

    Does anyone else here use a DCF valuation model to get their target price for CLF? I'm curious what you have for your inputs

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