Can You Trust Syntax-Brillian's Higher Guidance? (BRLC)

Syntax-Brillian Corp. (NASDAQ:BRLC) is seeing its shares going bonkers this morning.  After the open shares are up close to 20% at $6.65 and it has already traded close to a full day’s trading volume.  The company increased its revenue guidance to a new range of $1.1 billion to $1.3 billion from its prior forecast of $950 million to $1.1 billion.  It maintained revenue guidance of $190 million to $210 million for the June-end quarter, and gross margins will be within or above the top half of the range of 15% to 17% that it had previously forecasted.

Syntax-Brillian expects to report its financial results for the quarter and fiscal year ended June 30, 2007 no later than the second week of September.  That is a pretty long ways out for a quarterly report.  As a reminder this stock has a HUGE short interest with more than 17 million shares listed in the June short interest, which was listed as more than half of the float at the time.  Also, this company has made TWO secondary offerings in a manner where you have some trust issues with management. 

If you read through this release, part of the increase is due to an accounts receivable issue from South China House of Technology.  You’ll have to read through the press release wording, because the way this is written the verbage could be considered ‘up for interpretation.’

Jon C. Ogg
July 16, 2007

Jon Ogg can be reached at [email protected]; he does not own securities in the companies he covers.