Andreas: Good points. A few quibbles. Inventory was reported as nearer three weeks, not two. This is a dramatic improvement over 4Q 99, but still leaves three weeks, or so, to be cleared off in 1Q, probably at reduced price.
If my hunch was correct and postponements of commercial PC's occured in 4Q to wait for 1Q iPaq, then 1Q should be good for PC's.
1Q earnings are typically flat or up slightly on 4Q. So why did Capellas say it would be sequentially down "for seasonal reasons" this time? Given all the improvements shouldn't it be at least flat and more likely up?
I don't think it is enough to say he was lowering expectations - he lowered them in 3Q and 4Q and proved to be right.
Come to think of it, though, I think he will always make earnings if he sells of $50-$100 million of the securities in the portfolio, as required. But I think the Street will be expected to be told if the operational earnings are going to fall short of their expectations. |
