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Technology Stocks : LSI Corporation
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To: Jock Hutchinson who wrote (16806)2/1/1999 10:51:00 PM
From: patrick tang   of 25814
 
I don't think Wilf was kidding when he said that growth is either below 10% or above 20%. I think LSI has already shifted into the high growth mode:

Q4 with 3 months of Symbios = Q3 with 2 months of Symbios + 14%

That first month of Symbios in Q3 that wasn't counted probably accounted for ~ 25%/3 = ~8%, assuming Q3 sales back end loaded and last two months shipped ~ 75% of revenue and Symbios accounted for ~1/3 of new LSI sales.

Thus Q4 real sequential sales increase is >5% (14% - 8%) over Q3. Not only that, they had no problem making those numbers - remembering that Yahoo thread reported that LSI did not need to make last minute shipments to make #s. No wonder the analysts all jumped on the wagon.

So baring strange world-wide global events, I think we are taking off.

Going back to Q3 conference call, the 17% margins business model was 'based on flat sales going forward'. Any additional sales would be higher margins because of no added R&D, SG&A and minimum capital expanse = 43%. If LSI were to grow 5%/Q going forward, and 17% is figured off Q4's numbers, I think we will have more than the 65 cents Q4 '99 earnings that you projected in your cc summary. Perhaps those less mathematically challenged than me can run some kind of Excel spreadsheet going forward and see what our year end pricing might be.

patrick
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