hey, if you're gonna school the doc (in history), at least you could tell him that PMC stand/stood for Pacific Microelectronics Centre. <vbg>
news to me, anyway (see local flavor below).
on a self-absorbed note, i doubled down (double downed?) on PMCS this a.m. and added to the AMCC pot. (yikes! on a little bit o' the house's money too.) btw, where is everyone? did i miss the blue light flashing over in slots?
can i get some more chips over here?
geocities.com
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PMC-Sierra soars to high-tech heaven Market cap of $13-billion (U.S.) makes little-known chip maker B.C.'s largest firm
ANN GIBBON
01/24/2000
The Globe and Mail
Metro
Page B4
Vancouver -- A year ago, a little-known chip maker named PMC-Sierra Inc. was toiling away in Burnaby, B.C., while its shares traded in the respectable yet unremarkable $31 (U.S.) range.
Twelve months later, the company is a Canadian high-tech high flier. And last week, it became more prominent than ever after strong annual earnings and bullish talk about future growth pushed its stock price to record levels.
It ranks as British Columbia's largest company in terms of market capitalization ($13-billion) and stands out as Canada's third most-valued high-tech company after giants Nortel Networks Corp. and JDS Uniphase Corp.
Shares in the maker of chips that power Internet systems soared to $191.25 on the Nasdaq Stock Market Friday, a rise of $16.75.
Investors went mad over the stock after PMC-Sierra unveiled a profit for the year ended Dec. 26 of $67.7-million or 90 cents a share, almost double the $37.5-million or 54 cents a year ago. Revenue grew to $262.5-million from $161.8-million.
Chief financial officer John Sullivan said the explosive growth of the Internet and the rise of companies such as long-distance carriers that lay down fibre to transport Internet data are fuelling demand for PMC-Sierra's chips.
The company, which became a member of the coveted Nasdaq 100 index a month ago (the index holds the largest non-financial companies on Nasdaq and criteria for entry are demanding), trotted out a few more goodies for investors as it released its results. It announced a two-for-one stock split effective Feb. 11 for shareholders of record Jan. 31 and said it is buying the remainder of an Irish circuit-board design company called Toucan Technology PLC, with 30 employees, for $26-million in stock. (It already owns 7 per cent). The deal follows the recent purchases of three U.S. companies.
PMC-Sierra supplies chips to telecommunications heavyweights, calling its products the items that power the equipment forming the Internet's backbone to make it faster and better. "These chips are like traffic cops," explained Joseph Osha, analyst with Merrill Lynch Global Securities in New York. "They get packets of [Internet] data and direct them." His 52-week target price on the stock is $220.
Major clients include the Big Three telecom equipment giants: Nortel, Lucent Technologies Inc. and Cisco Systems Inc. In fact, Mr. Sullivan said, those companies account for half of PMC-Sierra's total annual sales.
Ironically, Lucent is not only a client, it's a competitor that makes the same product in-house. But Merrill analyst Mr. Osha said that often it's cheaper for customers to buy from an outside company such as PMC-Sierra that can spread its costs over a broader market.
PMC-Sierra began life in 1984 as Sierra Semiconductors Corp., a Silicon Valley company based in San Jose, Calif. In 1992, Sierra invested in a research and development division of BC Telecom Inc., which has since been renamed Telus Corp. The joint venture between Sierra and BC Tel's R&D division was then spun off to Sierra and renamed PMC-Sierra (PMC stands for Pacific Microelectronics Centre). Then in an unorthodox move, in 1997 PMC swallowed its struggling U.S. parent and has never looked back. The manoeuvre caught the attention of U.S. investors and momentum has been building since.
But growth hasn't come anywhere near that which took place in the past year.
With a price-earnings ratio of more than 200 -- not that unusual for high-tech darlings these days -- one analyst questioned whether the current pace of growth at the company can be kept up.
"I have significant concerns about the multiples of any high-profile tech stock today, and the issue of whether they can be sustained causes me a lot of white hairs," said the analyst.
The analyst said he doubts that PMC-Sierra can pull off another doubling of growth this year, although he said the company will still undergo "extraordinary" expansion. "There are only a handful of instances where it's possible for a company to double its earnings every year for three years," he said. |
