Adaptec (ADPT) Message Board

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Technology Stocks : Adaptec (ADPT)

ADPT 14.09

-0.4%

Nov 14 9:30 AM EST

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To: Jasman who wrote (1018)	2/12/1998 8:37:00 AM
From: Starowl	Read Replies (1) of 5944

Jasman: Just checked a report on Adaptec. It projects flat earnings for next six months or so. Assessment is that company is suffering from inventory buildup in distribution channels and apparently weakened demand for its SCSI adaptor cards. Also, the report notes disk drive maker inventory buildup has hurt sales of Adaptec microcontrollers but projects the company can sustain its 60-62 percent gross margin rate and control operating expenses. Given projected overall growth in the server and high-end desktop market, according to this analysis, Adaptec's products will do well in the long run. But share price not likely to do much for six months. "Lackluster" sales growth in that period. Cites uncertainties with Asia problems on the technology sector and product sell-through via distribution partners. Above is excerpted from S&P report, which admits being surprised by the company's shortfalls last quarter. Prior to the earnings report, this service in early January rated Adaptec strong buy and five stars. Now it gives it a hold rating. This is why I believe institutions will be just toying with the stock until positive signs of inventory movement appear. Wait-and-see mode. Starowl

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