Post by ptnewell on YAHOO re: MU...
Re: MU Earnings delay about CC ?s????
by: ptnewell
03/22/01 11:06 am EST
Msg: 236692 of 236784
Earnings delays pretty much always mean there is really bad news, and
time is needed to sugercoat it. It is astonishing that no analysts are
calling Micron on this. The revenue last quarter was 1.8 billion,
this quarter its just over 1 billion, way short even after multiple downward revisions.
They say they "had a slight profit from semiconductor operations." Translation:
They lost a lot of money. Obviously if they earned enough to cover debt
payments, say, they would have said so.
For that matter, with things admittedly going awful at Micron Electronics MUEI,
which is 60% owned by MU, there is lots of room for funny stuff.
Is MUEI overpaying for the DRAM they buy from MU? What about that DDR being
sold at SDRAM rates as a promotion?
Who is taking the charge for that, MUEI?
Even if you put aside the fact that MU has rivals (Samsung, NEC, and Toshiba)
who are actually profitable, there is no way a money losing company should still
be trading around half what it sold for when it was supposed to be earning $5.40/share
next year.
I believe some of the people shorting semis have been using MU as their hedge,
figuring its low trailing P/E would cover them if semis went up.
Others see it as a "safe haven." But cyclical stocks in downturns have never brought
20 times maximum earnings in the previous cycle.
More like 2-5 times the previous maximum.
And companies that go from projected earnings of more than $5.00/share to losing
money, while some rivals are still profitable cannot possibly trade up.
I just cannot believe MU can defy gravity forever. Its fundamentals have
deteriorated more than almost any other semi,
but its trailing P/E still gives it a magic blanket of invulnerability.
Can't last.
(P.S. don't tell me about the slight firming of DRAM prices. That's like saying
if the losses stop getting worse each quarter the stock should go up. That's
bubble-think.) |
