WDC/Sandisk Corporation Message Board

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Technology Stocks : WDC/Sandisk Corporation

WDC 176.01

-0.2%

1:52 PM EST

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To: Art Bechhoefer who wrote (15861)	10/22/2000 12:08:12 PM
From: orkrious	of 60323

I think the significance of the slightly lower projection for Q4 of $17 million, down from about $18 million or so, reflects simply the wish to exclude one-time licensing fees from any estimate of future fees. Art, no disagreement from me. Note though, that the Q3 royalty guidance was $17-17.5 million, and actual was $19 mil. Now the guidance is $18 mil, so you can figure that royalties will be $19.5-$20 million in Q4, plus whatever fixed costs they get from new licensees. This (the actual coming in $.5 to $1.0 above the guidance) was specifically alluded to by Eli during the CC in response to a question about royalties. Now, with royalties which flow directly through to the bottom line growing 5-10% sequentially, sales increasing 100% a year, and margins improving each quarter, how do you get a stock price with a rolling PE of 40? It doesn't make sense. Jay

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