Forum Archive Index - January 2002

["Jeremy" <jeremy@electrosilk.net>]

Imagine if e.g. TEL was expected to earn
> $750m but only managed $735m. Not a huge difference and still a profit but
> the forecast has been missed and the shareprice is likely to dive.
However,
> if AMZN forecasts a loss for $10m but manages only to loose $8m in a
quarter
> the shareprice is likely to hike.

This is where I get a bit confused. Making a loss means loss of net worth of
the company.  It means no dividends (unless they strip more capital out or
borrow or something)  It means my 100K (or whatever) in the company returns
nothing in real terms.  I would be better off leaving it under the bed, or
at least investing in some other operation that consistently returns
dividends or gains in value.

Making a loss does not equate to a jump in the share price unless some other
factor is involved.  In the CAH case the only new factor is they didn't make
as big a hash of it as they were expected to.

CAH are offering an interim dividend of 3 cents per share.  At years end I
can't see that being improved on much at all (in real terms).  It does not
equate to an 8 cent per share hike in the price today. For example,
pre-existing factors militating against any recovery include the latest
downturn (yet again) in the Australian building market.



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