<<Brute force?>>
Looks like it, and expensive force too.... :o) From last
qtr:
Firm Revenue gr mrg rev/ppe rev/da rev/ta net mrg
WDC 560,174 3.61% 3.57 23.72 0.73 -16.33%
MXTR 589,321 2.35% 4.03 36.49 0.68 -10.50%
HDD 889,024 11.74% 5.87 51.51 0.66 0.56%
SEG 1,645,000 18.91% 1.03 9.37 0.25 -19.21%
The metrics are qtr revenue/dollar of ppe, qtr rev/dollar
of qtr depreciation and amortization, qtr rev/dollar of
total assets, and net operating margin (excluding VRTS
gains and all that other industry wide "one time" monkey
business).
The three virtual players have all been ground down to
roughly the same profile, HDD-MKE relationship being a tad
different. Interestingly, the most virtual one (HDD) also
appears the most virtuous since it made it into the black.
Seagate is much harder to figure. True, its gross margin is
50% higher than HDD's but it takes 6 times the investment
in plant property and equipment per dollar of sales. What I
end up wondering about here is how much of this huge ppe is
head, media, and assembly capacity that is never going to
be used. The interesting thing to me is that Seagate is
losing more money operationally than the other three
combined, still its all overwhelmed by the riches in VRTS,
SanDisk and so on. An amazing story no matter how you look at it :o)
Best Regards......Tom |
