I listened to the MOT CC again on their website. VCall crashed continuously.
It is like watching a powerpoint presentation. Wow.
Edward Ganz - IR
- 19% increase in sales y2y, 22% if Iridium excluded
- net earning 145% increase y2y
- 63% worldwide sales for revs
- 1B in R&D, 33% increased y2y, 11% of sales
- 14% increase in orders y2y, backlog up 30%, up sig in broadband and semis.
- Sales of MOT wireless phones increased 70% Y2Y, 3% q2q
- 80% y2y increase in CDMA products, TDMA products up 100% y2y,
- 20% y2y decline in digital phone prices, much faster than expected
- Paging products revs down to lack of sales, market stabilize
- Consumer radio had sig growth (but doesn't discuss)
- Network system products - up 11% y2y
- Broadband communication had 15% increase y2y, North America accounts for 90% of sales
- semiconductor rev up 24% y2y - worldwide growth 20-25% in 2000 and stronger yet in 2001. Operating margins increased seven straight quarters
- 18.8B in equity of companies invested in. NXTL 7.4B, LVLT 7B, BRCM 2.1B.
Merle Gilmore - ExcVP, pres of comm sector
- In Eupore, Africe, and Middle East are seeing shift to low-tiered prepaid phones which hurt MOT margins. Will introduce low-tier GSM, TDMA, and CDMA phones with microbowsers. Some will have a FM radio too. Demand is strong.
- 275M worldwide sales in 1999, 400M this year
- Trying to make "Web w/o wires" a reality for cellular handsets
Ed Breen - pres of broadband communication sector
- Record first quarter $880M in orders, a 46% increase y2y
- Interactive digital set top orders grew 70% y2y, cable indstry is capable of deploying digital cable to respond to strong demand by the consumer
- Set top unit produced should be 5M this year, can do 8M units/yr. 50% growth rate y2y. 1.2M units shipped this quarter.
- MOT networks passed 50% of TV in the US.
- Cable modem shipped 500K units during the quarter, 300% y2y, and 50% q2q. Cable industry is moving ahead in this high speed access. 2000 should ship 2.5-3M units during the year.
- First supplier to received Cable Labs certification for cable modems. MOT supplies modems to the 10 largest cable companies including a multi-year agreement with TMX.
- MOT saw increased demand for its gallium arsenide amplifiers.
- International cable markets are rebounding.
- Convergence of voice, data, and video services are converging at breakneck speed.
Bob Growney - COO
- Net margin expected to improve 5.1% to 5.3% next quarter.
- 39.8B in sales for the year 2000 or 24% y2y.
- Q2 should every sector improve and have sales 9.5B in
sales or 25% y2y then.
- EPS 0.67 for Q2.
- FY 3.14 EPS for the FY or 67% increased vs. 1999 EPS 1.88. Lower due to shift in low-tiered phones.
Ed Breen handles questions
- Merle explained that double digit growth may not be possible in the handset communication sector.
- Will do see the China market moving. GSM market moving, maybe CDMA a possiblity there. We do see GPRS revenues coming late Q2 or Q3.
- Component storages affected unit sales in phones, had to pay a premium for some components which is a spot market.
- We do expect component shortages to ease in the q2.
- Midtier WAP phones should see increases in sales
- Expecting to grow faster than the market in units shipped and dollar volume.
- Entering longterm agreements to ensure capacity reservation for components. Beginning to believe that this ramp up is going to continual.
- Expect operating margin to improve sequentially in the PCS division.
- Aspira - working closely with CSCO in making this architecture a reality, continous stream of customers showing interest, no full orders yet. NOK has joined us in one exit stream. Discussing HDR vs. one stream direction.
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Unbelievable repeat questions on the handset margin area. BofA and others asked Q's that were already asked wasting everyones time. I see the semiconductors and the cable set modems of more interest, but not a frigging question in the sector. More analysts worried about handsets and missing the two areas the MOT is growing the most.
This low tier phone issue is interesting as I have seen cab drivers and others who pay per call. The user group in the US that I have dealt with: doesn't want a cellular bill, worries about theft, located in big metropolitan area, and pays to recharge the phone after using $30-50 worth. The shift in Europe may indicate the trend globally as did prepaid phone cards did five years ago. College kids can be given a phone with a prepaid amount. No surprise $300 phone bill. Right now US rates are cut throat so this issue isn't going to take hold in the next six months until phones gets cheaper about $50 with 20-25 cents a minute charge.
The drop in future projection for FY EPS is decieving as it is up 67% y2y if MOT meets projections. I see the PCS component shortage probably affected this quarter more than normal and the lower of earnings is not justified. Analyst couldn't ask what components were in shortest supply, but I'm betting power amplifiers, since RFMD and others were having trouble meeting demand.
Consumer radio revenues were not discussed. Not really familar with MOT work in this area.
Cable lab certification is significant as I remember CNXT not passing.
So many questions, too many analysts. Hope this helps as I didn't see notes on RB or Yahoo.
Jack |
