Not the current fiscal year but this quarter and the next three was where I was going. Just 4 quarters in a row.
$0.16 was rough. When they actually file the quarterly, we'll be able to go through that and compare to the statements made in the conference call to get a better idea of where they might be in the coming quarters.
The deferred revenues is going to be the tricky part to forecast, but I'll try. They are not recognizing revenue until after they transfer technology to customers. The current amount this quarter, off the top of my head is around 15 million. This will be recognized within 9 months according to what I heard on the call.
How I think they're going to be able to increase income from where they are today:
160 engineers working fulltime for CONTRACTS with Sony and Microsoft. They earn between $275 and $300/hour. Margins about 50%. The revenue from those contracts will not be recognized until the technology is transfered. Within the year it will be. When the products ship, transmeta will see royalties for each chip. There's talk of additional contracts both continued and with new companies.
They're working with handset manufactures to bring their fast yet low power processors to that market. NEC was mentioned. As Steve Jobs said, "in the future, it's going to be about performance/watt." Transmeta has the best technology as far as that is concerned. (Intel is catching up) If people want their portable devices to do everything and then some while giving reasonable battery life, they're going to need power saving technology of some sort.
They also talked of a phenomenon called "leaking" where processors made with new 90 nanometer and smaller processes have problems with power leakage when the processors are used. IE , they get REAL hot while wasting power. This doesn't just effect embedded devices, it even effects big iron like servers. It's why IBM had to resort to dual cores and SOI. Processors can be made fast with the transmeta technology without the expense of dual core, SOI or fancy cooling.
and I'm here to learn, so when I update this thread with my thoughts on estimates after they post numbers, pick me apart if you disagree again!
Quote from KevinK:
Dude--if you are going to make a fundamentally based arguement do your homework:
Even the 2 analysts covering this stock believe the company will not earn positive earnings this fiscal year. And the one analyst covering the stock for fiscal 06 thinks the company will earn a mere .05 per share. Even though this is a growing company I mean your $3 price target means you think the company is worth 55x earnings/enterprise value.
You probably know more about the company then I do since I just glanced at the ratios and estimates, but if you are going to make claims such at .16 this year, please justify it.
Now if you can justify 1) your estimates 2) your price target...please do so.
