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Technology Stocks : Disk Drive Sector Discussion Forum

WDC 152.88

-5.9%

3:59 PM EST

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To: Frodo Baxter who wrote (3091)	4/27/1998 8:33:00 PM
From: shane forbes	Read Replies (2) of 9256

Yikes. Though I would not classify the c.call as great I would not prhrase things as badly as you did. I would especially point out that the forward looking stuff was "cautiously optimistic" - something I have not heard in a long while.: A few points about your comments: (1) RE: 5.2 mln units, 160 ASP Though 5.2 * 160 = revenue, I don't think they specifically mentioned ASPs when asked. By taking the average like you have done you are mixing the junk in the channel that they are desperately trying to get rid off (like everyone else) and is therefore pretty cheap (perhaps 2.5?) vs. whatever else in new. They admitted it was "aggressive" and more than expected (hence the revenue shortfall) but they did mention that going forward with "new OEMs and new quals they see improvement in ASPs". My guess is at the worst we will see no more than slight erosion and then a pick up in Sept. Part of the problem was the longer time to qual. 2.1 that took longer than anticipated. (2) RE: clustered around low capacity points to boot I thought they said 3,4 and 5 Gig were all within a few hundred (?) thousand of each other and they were abandoning the "nasty" 2.5G. (3) I agree with the 0.67 loss. Important though to point out as you did that operational performance is not expected to deteriorate - this is purely >tax related. (Then again one could argue that this q's results really hurt and I agree.) (4) Sure the LTD increased. But that we knew. What might be fair to point out is that this was a long term increase in debt to shore up the short term current ratio. The CR was a bit precarious at end of last q - now it is looking much better. And just in case anyone is unaware the conversion is "only when they show a profit" (whatever that means and whenever that happens.) ---- Shane.

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