Nord: Many of us are less gifted at understanding that qualitative
description of the technological hurricane that you allude to and are
centered in.
I am not trying to be abstract or cute. The message I tried to suggest in my prior posts include.
1)ATM will be a significant part of the rollout of broadband services
2) NN by several "independent forecasting entities has the largest marketshare and is forecasted to grow this market share
3) NN is the technology leader in these markets
4) according to these predictions above this market for NNs' products will grow very fast over the next couple of years
5)the infrastructure for carrying long distance broadband services can be based on legacy copper/cable but to see the full benefit of broadband a new infrastructure is needed. Fiber IIXC QWST etc and satcom iridium and others. this new pipe is has been being lit/launched over the last several years that soon there will be enough capacity to handle the demands of broadband bundled services
6) the eye of the hurricane the seeming lack of growth of NN's earnings 5c shortfall does not reflect the storm of activity going on in the fab plants at NN or in the field as ATM is ordered installed and put on line, witness the 45% qtr/qtr growth in backlog orders for ATM in pre announcement.
"For less savvy folks like myself, numbers represented by Revenues per
share and earnings per share together with their annualized growth
rates, are easier to understand. These parameters either in aggregate
for the Industry or considered on an individual basis must encapsulate
the qualitative descriptors of the growth you describe."
Doug I respect your thoughts. I am a big picture kinda guy. The yr/yr revenue and earnings suggest growth in new target markets is well underway for NN. As with any new technology the ramp of production, marketing of, and delivery and instillation of product can vary depending on demand for product, fab capacity, and economic conditions globally. Temporary fluctuations in regional demand ie global slowdown due to emerging market problems, may negatively impact sales on a short term basis. In addition, as with NN the legacy technology sales to emerging markets was slower than it might have been otherwise resulting in a more rapid drop off of sales of low margin last cycle product.
The final point is that while I cannot predict qtr/qtr rev/earnings that the fundamental growth of NN's targeted markets has been guesstimated by those whose job it is to report on market trends, size and future prospects. If, as I am suggesting there is a large market for NN's wares. If the demand is from all parts of the wired world and the demand for product is heating up oustripping current product availability [supply/demand disequilibrium] this should IMO lead to higher sales/ higher margins for NN. The prior market forecasts I posted should give some idea to the size of the markets for ATM going forward. If, in fact, the growth and increase marketshare come to fruition the rest should not require much quantitative analysis number of units up + SG&A flat (0) + Demand>supply=increased margins/revenue and profit.
Good luck to all.
Norden |
