C-Cube Message Board - Msg: 11647359

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Technology Stocks : C-Cube

CUBE 36.52

+0.3%

Dec 12 3:59 PM EST

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To: Black-Scholes who wrote (46305)	10/20/1999 9:01:00 AM
From: ggscott	Read Replies (1) of 50808

BS, hope you're hungry. I think AB was guiding us to the fact that the Semi group will grow at a faster pace than Divicom through year 2000. Look at the STB market. $ 15 per box times 25% unit growth, but when the San Diego front end chips are integrated in mid-2000, Cube's revenue goes to $30 per box,on each of the 25% more units. The math is fairly straightforward: for each unit of current STB revenue in 3Q99, at some point in mid to late 2000, the run rate will be $15 times 2(for bill of materials) times 1.25(for 25% unit growth) or $37.50. So total STB revenue in 4Q00 will likely be 250% of 4Q99 STB revenue, or a gain of 150%. This obviously won't happen across all of Semi's product line but AB was telling us that Semi is going to be an important part of the overall growth engine! Over the past several years, Semi has had great unit growth offset by equally great ASP weakness, resulting in a flat revenue line. I think AB was saying that we should now expect strong overall revenue growth from the Semi division. And I don't personally think that the analysts have factored this into their earnings models. New targets anyone?

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