Steve, I see I made another mistake after listening to AEA. The company guidance for Q4 is 48 cents per share, not 46 cents per share. 46 cents per share was the analyst's consensus estimates. The consensus estimates have just been raised to 47 cents per share. It seems the analysts are beginning to believe the numbers. See the "consensus EPS trend" under this link and you will see the consensus estimates for Q4 have been slowly rising towards the company guidance.
biz.yahoo.com
Here is the snip of the Q3 earnings release which contains the actual Q4 and fiscal 2001 guidance:
www2.marketwatch.com
SNIP:"With more than 60 new products introduced since mid-1998, the additional wafer capacity that we expect to bring on line in 2001 and our licensing strategy for embedded applications, we believe SST is well positioned to become a strong leader in flash memory. Looking forward, we expect to see robust growth in our business through the balance of 2000 and well into 2001. For the fourth quarter, we expect our product revenue to grow approximately 20 percent from the third quarter, mainly constrained by wafer supply. Product gross margin is expected to expand to approximately 47 percent, based on expected cost improvement and assuming continued stable pricing environment for the markets we are in. Royalty revenue is expected to be greater than $10 million. Operating expenses are expected to result in an operating margin of greater than 35 percent. Our expected tax rate is approximately 35 percent for the fourth quarter and earnings per share are expected to be approximately $0.48.
For the first quarter of 2001, we expect our product revenue to grow approximately 20 percent from the fourth quarter of 2000. Product gross margin is expected to expand to approximately 49 percent, based on expected cost improvement and assuming continued stable pricing environment for the markets we are in. Royalty revenue is expected to be greater than $6.0 million. Operating expenses are expected to result in an operating margin of greater than 37 percent. Our expected tax rate is expected to be approximately 38 percent for the first quarter of 2001 and earnings per share are expected to be approximately $0.56.
For fiscal 2001, we expect our product revenue to grow approximately 125 percent from fiscal 2000. Product gross margin is expected to expand to approximately 50 percent, based on expected cost improvement, additional products and applications and assuming continued stable pricing environment for the markets we are in. Royalty revenue is expected to be greater than $30.0 million. Operating expenses are expected to result in an operating margin of greater than 38 percent. Our expected tax rate is expected to be approximately 38 percent for fiscal 2001 and earnings per share are expected to be approximately $2.90,” he said.
Hope this helps. I am sure you have read the guidance before, but it is worth printing again for potential new investors. Bottom line is still the same: SST is a great buy if the company does what it says it is going to do! I am optimistic that they will. Their guidance has always been very conservative in the past and a lot of the forward sales have already been made on volume purchase agreements.
Best, Huey |
