I really hate to pass on stuff like this, but the news is the news. I wonder if the institutions have already priced in this sort of downside after the Bear, Stearns downgrade a week ago? There's sure no strength in the price this week. I thought OEM sales were reported to be doing pretty well, but this report seems to disagree.
Does anyone know if the Robertson Stephens Semiconductor Conference (mentioned on ADPT's website as happening this month) is going on, and whether this report came as a result of an ADPT presentation there?
From Yahoo's (usually pretty poor) discussion area on ADPT this morning:
Message 7346 of 7350
Robertson Stephens Report for
everyone to read
Jul 10 1998
10:59AM EDT
Here is what BancAmerica Robertson Stephens said -- it is on Bloomberg today:
"Since our last update in early June, Adaptec's business has nosedived more than the gentle drop-off we anticipated. Still under pressure from the downturn in the drive industry, June quarter sales of drive controllers likely declined quarter to quarter by more than the $10 million the company had previously advised. Hampered by weak orders from OEMs and from Japanese distributors, sales of host adaptors also likely declined quarter to quarter, even though distribution in Europe remained strong and distribution in the U.S. was acceptable. The decline in production volumes, along with the effect of promotional price reductions, also likely caused gross margins to fall into the low to mid 50% range. Moreover, despite the reduction in staff announced three months ago, operating expenses likely rose, mainly because of higher research & development expenses stemming from the acquisitions of Ridge and a division of Analog Devices. On the bottom line, we now expect the company to report June quarter EPS form operations of about $0.08, down from our prior estimate of $0.15. Because business trends are still largely negative, we believe that results in the September quarter could drop even lower and have cut our estimates for EPS from operations from $0.17 to $0.05 for the September quarter and from $0.90 to $0.48 for FY1999." |
