VLSI Technology - Waiting for good news from NASDAQ !!! Message Board

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Technology Stocks : VLSI Technology - Waiting for good news from NASDAQ !!!

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To: Robert Scott who wrote (3039)	2/27/1998 10:33:00 AM
From: Kevin Hay	Read Replies (3) of 6565

Where to from here? First of all, thanks for the compliments -- I'd buy all you longs a drink if I could. I totally didn't expect a warning. Anyway, back to biz. Excerpts from the press release and my comments.** The company expects revenues and earnings for the first quarter to decline from the first fiscal quarter of 1997 ended March 28, 1997 . Below last year I think is significant. If eps and stock price correlate we could be down to ~16. Can some one give a summary explanation of why this shouldn't happen? I kind of checked out of VLSI most of last year but I know tons of stuff has happened that sounded quite extraordinary at the time. But now eps will be below last year? Ouch. Orders and shipments for the company's products have slowed in the current quarter primarily in wireless communications and consumer entertainment... **Hand sets and STBs, right ? what else would it be? ...due to the cyclicality of these consumer-oriented markets, **huh? they mean seasonal downturn, right? ... the business uncertainties associated with the current economic situation in the Asia-Pacific region... **how can 'uncertainties' hurt sales? This sounds like a bs line. They wouldn't be pre-announcing if they were uncertain. ...and inventory adjustments underway at a range of customers. **Hmmm, this isn't good. I'd feel better about getting long if there were specific inventory problems with a 'few' customers. The company expects to see shipments return to more normal levels during the second half of the year. In the meantime, the company is reviewing and implementing a broad set of programs to stimulate revenue growth and control expenses. ***It's pretty hard to take their 'it'll be ok' line when they have revised their opinion about this quarter so recently. But then that's VLSI. Suprises up and down are common. So what to do? I should probably cover now and go long but I think there's a good chance we'll see a couple downgrades. And what's up with sales below last year levels? That bugs me. I thought we'd been through all this and had concurred that VLSI doesn't have 'that much' exposure to Asia. It smells a bit like there are other problems getting swept under the Asian carpet..., thoughts? -Kevin

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