I also just finished listening to the conference call. I concur with Paul T. Vu and RFF as to content and tone. The 40 minute call was more coherent, focused and consistant than last quarter's conf. call.
I counted 18 different analysts asking questions, so there was good coverage on the call. The usually negative DLJ analyst asked if all non-Accelar product lines declined sequentially. House had already said this was true across all geographies, product lines and customer groups. He did add that the new product cycle will be much stronger at the start of this next quarter than it was in January.
Bears Stearns asked about the old Accelar forecast of "thousands of units" vs. the current "100's of evaluation units". House did not know what the conversion rate would be for evals to sales, but did say that they do not believe at this time that there is any significant risk to the 10% sequential decline in sales they just announced.
Lehman Bros. asked when Bay would return to last qtrs GM of 51.5%. CFO said that hope to do so in June qtr., but most likely in Sept. qtr.
UBS asked the key question raised before about whether Accelar RS will cannibalize Bay's router sales. Answer was no, and in fact mid-range router sales are up.
Hambrecht&Quist asked if March industry transition issues will continue into June. House said maybe some, but many of those things are crystalizing(eg., 56K standard is set, GB is getting clarified, etc). This is the analyst who said it sounds like if you had another two weeks in the quarter you would have made the number. House laughed and said he is always hoping for a 15 week quarter.
Overall, it was a very good conference call, with alot of confidence in the future. The issue is if the analysts buy into that, given that the weakness this quarter was across the entire company.
In for a nickel, in for a pound. Still believe we will see 15MM shares traded on Wednesday. The specific research reports put out by these guys tomorrow will be interesting to read.
Good luck to us all(the longs, that is!)
Paul |
