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Technology Stocks : Seagate Technology

STX 282.86

-0.9%

Dec 9 4:00 PM EST

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To: Greg Cervelli who wrote (4208)	11/20/1997 8:29:00 PM
From: Greg Cervelli	Read Replies (2) of 7841

Several points of clarity often times it is easy to say things that may not be entirely accurate because it helps make a point. It has been called to my attention that perhaps I have have done this in my report earlier today. I'd like to clarify several of the points I made Paragraph 2) I inferred that they would not be at full capacity due to inventory. This was never stated by the CFO. Paragraph 4) Unrealized losses of 100mil from currency hedging not accounted for last Q will be spread out over several Q's. This again was not stated by the CFO. Rather, that information came from the 10Q in section 12 Paragraph 6) They will see a product from Quinta as early as the end of this fiscal year. Accept my apology for I misunderstood what I was told. Paragraph 8) 250mil in rev from software was a number that I calculated based on the 63mil from last Q. I was never told this, nor was I given a projection. I simply multiplied 63x4= roughly 250. Paragraph 9) At this I assumed that that they would cut prices to regain market share. That was never explicitely stated to me. Rather, I inferred it based on the response that market share was important. This is not to say that that he said margins were not important. Paragraph 12) I did not understand what he was saying about software. I realized I made a mistake when I read that seagate already had a software subsid. I think the point was that software was an important componet of their business. Paragraph 13) Considering the fact that I don't even know seagate's long term strategy, my statement that the investment in Dragon Systems does not fit it was rather unfounded. Dragon has a great technology and they invested in it. I guess since it didn't have a direct link to dd I assumed more than I should have Lastly, he never gave me a direct answer to the EPS question. All he said was that they released a guidance statement on or around Tuesday. I told him that I read an article where a Gruntal analyst lowered estimates from .25 to .11 . He told me he thought the concensus was somewhere around .08. and that .11 was probably too high. He told me they would be "Marginally profitable" I assumed that marginally profitable meant lower than the concensus. Obvisiously to be profitable they have to make some money, so I figured at least .01, and .05 was a good round number. I guess I would have been safer to say between .01-.08. I'm sorry for the confusion. Next time I promise a completely unbiased report I you have any questions regarding these clarifications please let me know. Greg

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