I just listened to the conference call replay. CEO said its a variety of issues, not one thing. Some of the problem areas discussed by management:
1. Back end packaging problems. Various things like bent leads, bonding and packaging problems. Not a yield issue, back end stuff. Nontheless, company had to scrap finished goods. Later CEO said some customers were concerned about manufacturing and quality issues. Editorial comment: Maybe this why customers are seeking second sources of supply?
2. Asia financial crisis is a contributing factor, but not the real issue.
3. 1st Q wireless PA volume is forecast to be about 1/2 of Q4 levels.
CEO said Company had about 15% of the market in 1997, will drop in Q1.
Said ANAD is declining faster than the market. Many issues: Reduction of orders, competitive solutions, product life cycles ending, slower ramp up to next generation. Will cut factory production to about 60% down from 80-90% utilization. This will let customers work down inventory. In a follow up question, CEO said Company will now delay the opening of the new Fab until 1999.
4. Major wireless trends. 3 volt PA and Dual Band platform.
On the plus side, CATV products are doing well. ANAD is encouraged by the activity on this side of the business. See General Instrument announcement.
On your comments, marketable securities are certainly not their own stock.
I think many analysts were caught by surprise, it seemed that no "guidance" was provided by the Company. I'm quite sure management was aware of these issues and maybe could have handled this better. The street sure did not like the way this was handled!
Maybe this could have been anticipated? Competitor TQNT disappointed in Q3, that stock was also crushed, although not all at once because they tried to give guidance. Dropped from the 40's to the high teens, only now rebounding. Now ANAD disappoints. I think ANAD will also come back in a quarter or so. Value players will soon take positions, performance will rebound by mid year and the stock will respond. While yesterday was a major disappointment for ANAD investors, today is an opportunity for those who were interested, but always thought the stock was too expensive. |
