The Quarter that Was
Revenue rose nearly 18% for the company's fiscal fourth quarter, no matter whether investors look to the GAAP or non-GAAP figure. On a non-GAAP basis, sequential growth was also a quite healthy 11%. Within the numbers, there was a quite a bit of good news. Enterprise revenue (which includes call centers, as well as customers like Vodafone (NYSE: VOD) and Comcast (Nasdaq:CMCSA)) was the weak spot, with a 5% drop in revenue, but healthcare was up 19%, mobile/consumer was up more than 34%, and imaging was up more than 43%.
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4 comments:
Nice thought and writing.
2 things I disagree a little bit are
1. I would put Free cash flow as leading indicator over accounting measures, after all, the company has already paid the cash for the companies, which is an investing activity, so intangible amortization makes no sense to me. In other words, operating/investing/financing are independent in terms of measurement. Same as stock comp, which is double hitting EPS by hitting both the income and the shares, I think it's ridiculous. Depreciation is another candidate if you want to use free cash flow which already deducts capex
2. IBM now is more of a partner than a competitor to Nuance, if you look at Nuance's filings/news
Chen,
I do use free cash flow as my preeminent indicator. Perhaps you haven't read my prior writing, but I'm all about cash flow. My point with the GAAP/non-GAAP discussion is that tech companies are still fighting a war that's over and using presentation standards that other industries largely do not.
Second, I realize IBM is a partner, and I mentioned this (though I see now as I review the piece that the editors removed that...). Nevertheless, it is not exactly unusual in tech for partners to eventually become rivals.
Thanks for your comments, though.
ss
thanks for the quick reply
could you tell me a little bit more why tech companies have this kind of reporting issues that other industries don't have? and is it purely related to intangibles or other things?
@ Chen,
I think it's because tech companies have historically relied more on stock compensation relative to other industries. So, for them, expensing stock options (as per GAAP) is a much larger delta for their reported earnings.
ss
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