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Periodically, "Stock Watch" will focus on earnings for the stocks that compose the GIS WORLD Stock Index, which debuted in last month's "Stock Watch" column. Earnings can be used to review a company's performance and relative well-being, and are an integral factor investors use to buy or sell stock. The stronger a company's annual earnings growth, normally the higher its price. Disappointing earnings can cause a stock price to drop dramatically.
Annual earnings for the companies that compose the stock index are presented in the accompanying table. The forecasts are mean estimates prepared by analysts employed with brokerage or investment houses. The fiscal year reporting period is shown for each company. But the most recent quarters all end June 30, except for Autodesk Inc. (ACAD), San Rafael, Calif., which ends its quarter July 31. Actual earnings usually are reported a couple of weeks or more after the quarter ends. The last column is the price-to-earnings (PE) ratio, which is simply the current price divided by the current 12-month earnings.
As shown by the table, there were no strong upside quarterly earnings. Some of the index stocks, however, had disappointing earnings. MapInfo Corp., Troy, N.Y., had a surprise drop in earnings a few months ago, as reported in last month's "Stock Watch" column. The stock price dropped substantially, and has drifted lower since then. Intergraph Corp., Huntsville, Ala., reported a much larger quarterly loss than expected, but it also announced cost-cutting measures in July. Some 500 employees, or about 7 percent of its workforce, will be eliminated this year (see Intergraph Downsizes, Cuts Jobs," page 15). The company expects to save $100 million per year, and that news has been positive for Intergraph's stock price. Intera Information Technologies, Calgary, Alberta, Canada, has lost money three of the last four years. But Intera announced plans in August to sell the company, distributing the proceeds to shareholders, which caused the stock to more than double in two months.
The GIS WORLD Stock Index
The GIS WORLD Stock Index is based on stock prices beginning from January 1994. The index has been revised through Sept. 1, 1995. The stock prices on the chart are as of this recent date and the beginning of 1995. Percentage changes are indicated from the beginning of the year and the last two months. Some individual issues varied significantly during the last couple of months, but the index increased 8 percent compared to 3 percent for the Standard & Poors 500 (S& P 500) index during this two-month period. Most of the increase could be attributed to Intera. During the first eight months of 1995, the index is up 50 percent compared to 23 percent for the S & P 500. As depicted by the graph, the index is more volatile than the S & P 500, especially recently. That's not unexpected, however, because only eight stocks compose the index.
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| Annual Earnings (per shr) | Qtr Earnings (per shr) | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Company | Symbol | Fiscal Year End* | Most Recent Qtr | $ 1994 | Last 12 Mos | 1995 Est. | 1996 Est. | 5-yr Est. Grwth Rt** | Yr Ago June* | Est. June* | Actual June* | Price to Earn. Ratio |
| Analytical Surveys Inc. | (ANLT) | Sept | June | 0.30 | 0.36 | NA | NA | NA | 0.10 | NA | 0.13 | 20.1 |
| Autodesk Inc. | (ACAD) | Jan | July | 1.14 | 1.33 | 2.07* | 2.43* | 20.5% | 0.34 | 0.51 | 0.52 | 34.0 |
| Intera Information Tech. | (IITCF) | Sept | June | -1.34 | -1.34 | NM | NM | NA | 0.06 | NA | -0.24 | NM |
| Intergraph Corp. | (INGR) | Dec | June | -1.56 | -1.78 | -0.77 | 0.86 | 11.9% | -0.45 | -0.08 | -0.48 | NM |
| Landmark Graphics Corp. | (LMRK) | June | June | 0.35 | 0.78 | 1.21 | 1.57 | 22.4% | 0.39 | 0.43 | 0.31 | 33.0 |
| MapInfo Corp. | (MAPS) | Sept | June | 0.59 | 0.70 | 0.75 | 0.97 | 36.3% | 0.15 | 0.22 | 0.14 | 28.6 |
| Trimble Navigation Ltd | (TRMB) | Dec | June | 0.53 | 0.64 | 0.79 | 1.04 | 33.8% | 0.13 | 0.20 | 0.21 | 50.0 |
L. Ried Schott is president of Schott Consulting Services in Playa del Rey, CA.
GIS WORLD Inc., November, 1995; pp 84.
(This article was reproduced with permission from GIS WORLD Inc.)