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Technology Stocks : Applied Magnetics Corp

APM 1.260

0.0%

3:58 PM EST

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To: EyeDrMike who wrote (10549)	12/3/1997 1:51:00 PM
From: T Bowl	Read Replies (3) of 12298

Has anyone taken a close look at the current First Call Estimates for APM? Here's what I see: EPS # Anals DecQ $0.39 1 MarQ $0.34 1 SepQ98FY $2.36 2 (avg of $3.00 + $1.71) SepQ99FY $2.10 1 When I looked at these I had 2 questions: 1) Why 2 Anals for 98FY? 2) Which Anal is more realistic in 98FY? $3.00 and $1.71 is a big difference! 3) FY99 is lower than FY98? I figured they would have completed the MR transition by then and be back to making $$$ If you look at the last few Qs of earnings: Q EPS 1 YR TR SepQ96 $0.51 DecQ96 $1.10 MarQ97 $1.16 JunQ97 $0.75 $3.52 SepQ97 $0.60 $3.61 DecQ97 $0.39 $2.90 Est MarQ98 $0.34 $2.08 Est JunQ98 SepQ98 $2.36 Est If I fill in the blanks by assuming equal earnings in Jun and Sep I get: Q EPS 1 YR TR SepQ96 $0.51 DecQ96 $1.10 MarQ97 $1.16 JunQ97 $0.75 $3.52 SepQ97 $0.60 $3.61 DecQ97 $0.39 $2.90 Est MarQ98 $0.34 $2.08 Est JunQ98 $0.82 $2.15 Est SepQ98 $0.82 $2.36 *Est That's dreaming(Esp the part about making $0.82 in the summer). The last time we heard from APM they said that the 1.7GB TFI head was to be shipped in Vol in 98. The last time we heard from WDC(17nov97) they expected the "3"" portfolio to have a ""significant increase"" in rev in 98." "The 3"" pgm has been killed and the 1.7GB products" are being ramped down faster and faster everyday. APMs Micropolis pgm is dead. Certainly the Anal who is projecting $3.00 for FY98 is wrong. My guess is at this point that it will even be tough to make the $1.71 in 98. (That would be $0.49/Q in Jun and Sep) Realistically I don't think there is any way for APM to make the estimates for the next 2 Qs(they are tied too close to WDC) to not feel a tremendous hit from the recent changes at WDC. My guess is that 98 EPS will be MUCH less - maybe even "close to break even by MarQ98, but it's just a guess." APMs 98 estimates have gone from $6.38 in Jun97 to what I think will be <$2 soon. My guess is maybe as low as <$1 for FY98. Certainly you will see that $3 estimate come down. APM has been trading at around 7 to 8 FPE98. Where is the bottom if we see $1 or $2 98 earnings estimates? Yes, I'm short.(more of a hedge for my RDRT shares) Can someone tell me what's wrong with my logic? todd

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