A recent Dolby Labs newsletter headlines D-Cinema. And states, "a milestone year for the digital cinema industry". I'm not sure what the digital cinema industry is. What I am sure about is the fact that Dolby, a publicly traded company( with a share price in the $33 - 38 dollar range, and a high current price/earnings ratio of 38) is put into the box of every other public company. To improve sales and profit margins on a regular and in most cases, quarterly basis, so as to endear themselves to the Wall Street analysts who follow and rate their performance. What drives a stock's price is earnings and/or its earnings potential. In Dolby's case it is currently the marketing and sales of its D-Cinema based products to the movie exhibition side of its business that will contribute to its overall growth and profitability- as the sales of sound processors and peripheral products to theatre exhibitors is not growing as it once did.
I'm not faulting Dolby. There Digital Cinema products are stellar and perform extremely well. Additionally, Dolby has one of the greatest brands and certainly an insiders place in Hollywood - one which is well earned and deserved.
It is only natural that Dolby push its D-Cinema products. The recent JPEG2000 upgrade tweeked its share price up but with P/E in the high 30's Wall Street will be looking for higher sales and earnings.
Jim Lavorato
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment