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Yet another one for the books: On Tuesday Sigma Designs (SIGM), in the midst of an options probe, reported abbreviated third-quarter results that don't include gross margins.

Yet on the company's conference call the company said it is "pleased to report an improvement" in gross margins but failed to give a number. That prompted analysts to play 20-questions. Finally one said, "...You had mentioned back some three months ago that you were looking at one to two percentage points increase in your gross margin percentage. So you're basically saying that you did a bit better than that."

A company exec responded, "That's correct."

So why not report the number outright? Don't blame it on options-related issues because options don't impact the gross margin -- and just about every company that has had options-related issue, even those who have given abbreviated results, have given gross margins. A spokesman hasn't responded (yet) to my query.

That hasn't stopped analysts, already thrilled with better-than-expected revenues, from reporting "better than expected" margins without knowing the actual number or seeing full financials. At least one analyst, operating in the information vacuum, boosted his stock target.

Reality is that while gross margins may be rising, perhaps to 50%, they have been on a swan dive over the past six quarters from 69% to 48% a quarter ago. During that span, the stock has gone from about $8 to $26, including today's 13% rise.

The beat goes on...

SIGM 1-yr chart:

SIGM

Source: Sigma Designs Playing a Strange Game