Disk Drive Sector Discussion Forum Message Board

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Technology Stocks : Disk Drive Sector Discussion Forum

WDC 286.32

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12:15 PM EST

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To: Z Analyzer who wrote (1742)	12/11/1997 1:14:00 PM
From: Gus	Read Replies (2) of 9256

Lehman's research note summary: NEW YORK, Dec 11 (Reuters) - Lehman Brothers said on Thursday it cut its rating on shares of Quantum Corp to neutral from buy based on continued weakness in the hard disk drive market and lower expectations for growth of its DLT business. -- "As expected, continued weakness in the hard disk drive environment has lead to revenue shortfall and margin erosion in the quarter," analyst Kimberly Alexy said in a research note. "Unexpectedly tape growth decelerated from 116 percent in the second quarter to an estimated 66 percent in the third quarter as a result of product transitions and a realignment of supply and demand." 116% year to year growth = about 21% Q to Q sequential growth 66% year to year growth = about 13% Q to Q sequential growth "realignment of supply and demand" = DLT 7000 ($7000-$8000 MSRP) was 30% of product mix in September quarter and significantly more than that this quarter (40-50%??). -- Alexy said she was lowering her growth expectations for tape as a result of concerns surrounding a weaker demand outlook for personal computer server growth in 1998. 30-40% CAGR in mid-to-high-end servers over the next few years per QNTM. Something to keep an eye on. Japan is 15% of the total global market and Rest of Asia is another 15%. Asia is the trickiest part of the PC demand equation because it was growing faster than the mean. Now nobody really knows what the demand will be going forward. -- We continue to believe that the hard disk drive environment will likely continue to deteriorate before improving and that margin and earnings pressure will persist for the group," she said. -- Cuts fiscal 1998 earnings estimate to $1.81 per share from $2.26 per share and lowered fiscal 1999 estimate to $2.50 per share from $3.45 per share. biz.yahoo.com

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