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Technology Stocks : LSI Corporation
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To: DavidG who wrote (10199)2/26/1998 7:20:00 PM
From: shane forbes  Read Replies (1) of 25814
 
What was in the VLSI story that might be relevant to LSI:

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VLSI attributed the weak quarter to slowing orders and shipments, primarily in
wireless communications and consumer entertainment due to cyclicality, as well as
uncertainties related to the Asian economic crisis.

The company also said its quarter was hurt by inventory adjustments underway at
a number of customers.

VLSI said it expects shipments to return to more normal levels during the second
half of the year. In the meantime it is reviewing and implementing plans to stimulate
revenue growth and control expenses.

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There's those famous words: "Inventory adjustments", add in "Asia", and "wireless communications" and tomorrow should not be a fun day for VLSI shareholders. Or was all of this in the price of the stock!!!

Also LSI has mentioned consumer entertainment cyclicality but LSI tended to pooh-pooh it using PlayStation inventory at retailers as an example.

On another topic I think VLSI does a really good job keeping its shareholders apprised of goings-on. So their problems here may just highlight how difficult it is for these types of companies to guage demand. Maybe LSI is to be excused (somewhat) for similar sins in the past?

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All the dangers of having only a few customers coming to haunt VLSI just as it has done so many times to LSI.

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