Johnathan, this isn't about APM really, is it?
Now that some less-than stellar nummbers are available for APM, with a cloudy future outlook, you use the time to bash APM while the kicking's good. Long RDRT and short APM, are we?
APM is certainly in a difficult time, where the strategy of "transition in our own sweet time" appears moot. However 1) the MR development .vs. RDRT doesn't appear that far off, maybe what happened is that WDC lost its nerve when the 1.7 yield didn't immediately show well. I don't know that RDRT supplied any 1.7 heads, just that they've given up on producing them. So, is this a technology (1.7 tfi) that APM must write off? As supply to WDC DDs, maybe (BTW, I don't think WDC stopped buying TFI heads altogether, yet.)
Anyway besides all the technical issues about which we can endlessly speculate, evidently we have been in the midst of a "boom" time for DD manufacture since last summer. Seagate went to 70, WDC went ballistic, split, etc. Companies were earning money, after years of the doldrums.
Except RDRT.
Check the SI profile for last 6 quarters, RDRT netted a total of 4.3 million on sales of 1.6 billion. APM in the same business netted 114.8 million on sales of 658 million.
Ok, you say its only qtr-by-qtr that matters.
Qtr-by-Qtr, the highest net margin RDRT managed to eke out was 10.0, beating onlythe first (worst) net margin of APM for quarter ending 6/30/97. On a quarterly basis there are probably adjustments and "one-time" charges against earnings that you might take as excusesfor why 4.3million was the only change left from 1.6billion sales.
I won't say it is bad management, but the results of the two companies under the same time frame are quite different.
Lastly, I want to point out that the RDRT share held on 6/30/96 represents 5% less of the company than the same share on 9/30/97.
I look forward to your rebuttal because you probably know more about these issues than I, having traded the DD stocks longer. I've heard more than once RDRT being recommended over APM and I can't figure it out. OK maybe you are arguing on a "brighter future" hypothesis. These last few weeks teach me, however, that for techs the bright future is pretty much BS and I prefer they make hay while the sun shines. RDRT evidently has spent the last 6 quarters preparing for the future that is now upon them, while now people are dumping drives and there is a glut of MR heads for sale. APM is maybe a few months behind in MR maybe not that much.
Greg |
