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Technology Stocks : QUANTUM
QNTM 8.270+7.5%1:00 PM EST
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To: jgideon who wrote (6182)12/6/1997 12:15:00 PM
From: William T. Katz  Read Replies (2) of 9124
 
"Note that Lehman now has $2.26 for FY 98 compared to the street estimate of $2.67. If, or should I say when, others drop to similar levels in their estimates, that will constitute negative news -- even though QNTM has said nothing officially."

I have bought in assuming that QNTM will not meet estimates and that they will take some damage ($0.40 or better eps not including one-time charge). I think this amount of damage is at least figured into the stock price since WDC has preannounced flat earnings with catastrophic fiscal year downward revisions, and QNTM had moved down with it almost identically until just recently.

The rational viewpoint is to assume carnage in DD contribution this quarter and hope the one-time charge helps streamline the ops on the high-end for future quarters. I think it'd be incredible if they get close to estimates but you don't drop the stock price 40% and not lower your expectations.

Also, please refer to the OEM list I posted two days ago. QNTM and IBM are really raking in the computer manufacturers, while SEG and WDC appear to be lagging severely at least for the new higher-margin desktop PCs. While that doesn't mean QNTM is not getting raked over the coals with margins, it does support the idea that QNTM is not as bad off as SEG and WDC.

-Bill
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