This is what I said on March 8th:
I can’t begin to forecast the net effects of all these countervailing forces. But what I can predict is that the slowdown will be much less severe on WIND than most technology companies, and there may not be any perceived impact at all. Since WIND’s revenues dropped from 45% growth to 22% during the Asian crisis, I would expect better performance this time because many of the factors above are both powerful and new this time around. This is why I would guess that management’s 30% guidance fairly represents the low end of WIND's performance over the upcoming year.
So far the facts have proven my prediction right but by guess looks optimistic to say the least. As predicted, WIND has been impacted much less severely than most technology companies. I’m impressed revenues grew 20% in Q1 and that they make their original guidance of 6 cents.
After Q4’s CC, I guessed management’s 30% guidance was reasonable for reasons I clearly stated. What is better understood now, two months later, is that the technology economy of 2001 is far worse in the U.S. than what was experienced here during the Asian crisis. Based on the explicit reasoning given March 8th, I would expect everyone on this thread to have adjusted down the 22% experience and therefore the 30% guess.
The hell with excuses, you say, what about the 30% growth guess? (Why should you have to think and make adjustments?)
The answer is we still don’t know. Q1 came at 20%, with guidance reduced for Q2 and no visibility for the rest of the year. If the economy stays like it is much longer, or gets worse, WIND will be doing well achieve flat revenues. If the economy recovers fast like some predict, 30% could still happen. No one knows, and no one can know. But we can all guess.
TSD is in a different position than me. He can’t guess. He has to make sure that the company survives, even strengthens, in an extraordinarily negative economy. Consequently, he is restructuring the company to be profitable at lower revenues, while continuing to invest and strengthen strategic relationships with major customers. He guided accordingly; he did not predict anything.
Now, let’s be really clear about something. I DON’T PREDICT THE ECONOMY OR STOCK PRICES. I may guess occasionally, but a guess is a guess, not a prediction. I predicted that the slowdown will be “much less severe on WIND than most technology companies.” I guessed WIND could grow north of 22% this year. I still guess that. My guess is that Enterprise networking and storage ramp sufficiently in the second half to spur on network equipment and NAS companies, driven by a sizeable ramp in GbE. But it is just a guess.
Now, you have to help me out here. To me a guess is not something that rises to the level of accountability you are so quick to apply (well before my guess even has been proven wrong). What word should I have used to convey something weaker than a prediction that I don’t want to held accountable for because it is just a guess?
Allen |
