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Technology Stocks : SDL, Inc. [Nasdaq: SDLI]

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To: Kayaker who wrote (3180)	10/24/2000 7:02:14 PM
From: DukeCrow	Read Replies (3) of 3951

Revenues were down sequentially from $7.825 billion to $7.31 billion. EPS was flat sequentially @ $0.18/share. All this looks bad, right? In reality, this is merely seasonality at work. Go and check Nortel's numbers for the past 3 years. Revenues always decline sequentially from Q2 to Q3. The problem is that Nortel was being valued for a sequential increase in revenues even though it would have had to overcome enormous seasonality issues to do it. Those are unreasonable expectations. And when a company can't live up to unreasonable expectations it gets its clock cleaned, whether it's deserved or not. Look at NatSemi. Earnings will be up substantially YOY, but there will be a sequential decrease. It now has a P/E < 10. Is that deserved? The market sure thinks so. The rest of the sector follows. If people realize this was due to seasonality, we may get a rebound. If not, who knows what will happen. Ali

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