• In June 2006 I said they were wasting money on their consumer advertising. From a duopoly in the office/call center market, they were coming in third among consumers.
• I also thought the valuation was cheap, but preferred to wait for cash flow to improve.
• By July they were cooling off on their advertising and switching formats.
• The stock started rallying, and by October I decided not to fight the tape. I took a long position in call options and a short position in put options that would cost me nothing if the stock stayed range-bound but would give me exposure to large moves. Despite a couple of questionable moves, I held on to that position.
• The office/call center business started picking up and they finally took my advice and fired their marketing director.
So you’d think that with things now playing out as I thought they should that I would keep the shares I got by exercising the call options in June. Nope. Too skittish. I covered the shares by selling call options to lock in some profit. The shares kept rising and were called away from me last weekend.
Tuesday Plantronics announced first quarter fiscal 2008 net revenues of $206.5 million compared with $195.1 million in the first quarter of fiscal 2007. Revenues were within our guidance of $205 to $210 million. Plantronics’ GAAP diluted earnings per share increased 24% to $0.31 in the first quarter compared with $0.25 in the first quarter of fiscal 2007. Non-GAAP diluted earnings per share were $0.37 compared with $0.28 in the first quarter of fiscal 2007. Earnings per share exceeded previously provided GAAP guidance of $0.20 to $0.23 and non-GAAP guidance of $0.26 to $0.29. The difference between GAAP and non-GAAP earnings per share for the current period is the cost of equity-based compensation.
And I’m not seeing a penny of it.
PLT 1-yr chart: