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Technology Stocks : Micron Only Forum

MU 237.16

+4.6%

Dec 5 9:30 AM EST

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To: Bipin Prasad who wrote (2498)	9/19/1996 9:26:00 AM
From: Market Wizard	of 53903

TO ALL: According to First Call MUEI also "Accelaerates 4Q earnings Release to Today" First Call estimates Quarter ending Aug. 31 EPS at .17 v. .23 MUEI moved its release of its Aug. 4th QTR results from Sept23 to after the close today. No conference call for MUEI. "Investment Conclusion: While we believe MUEI is making a mark as a direct PC Vendor, the recent rapid price rise has discounted to a large degree the company's momentum as we head into the seasonally stronger fourth calendar quarter. In fact, we think earnings for FY97 would have to more than double to $1.30-$1.40 for the stock to have an even moderately attractive multiple. Though there could be some upside to our .90 estimate in the near term as component costs continue to favor margins for another quarter or so, we think such a large increase is difficult to forsee right now. We would be more aggressive with MUEI on a pullback to $12 or so." "We are forecasting total revenue of $463 million and earnings of .17 for the period. However, we suspect there could be .02 or so upside to earnings due to a better gross margin on PC operations as a resutlt of further component price cuts during the quarter. Our PC gross margin assumption is about 15.5% based on the DELL's recent surprising good gross margin, MUEI could see another 100 basis points or so, which, by itself, could lift earnings .02 ..." "Given that its price has risen faster than any PC vendor in the past month or so, from $10 to more than $18--we suspect some profit taking could be in the offing , given patient investors a better buying point." Does anyone think that the earnings here will be strong and MU is using this to cushion its own negative earning report?

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