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Technology Stocks : LSI Corporation

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To: M. who wrote (13498)	7/11/1998 11:29:00 PM
From: Hightechhooper	Read Replies (2) of 25814

M, LSI still has one of the longest leadtimes in the industry due to the fact that they are the sole supplier for much of their business. It is well documented that they took on some low margin business about a year ago which is just now coming into full production. As a result, their leadtimes are pushing out further because all those customers who are sole sourced from LSI will build inventory rather than risk being left without product. This means that their strong orders in Q1 will most definately have been shipped in Q2 so they should have no problem meeting expectations. The wild card is how did orders come in this qtr for shipment next qtr. It is likely that they did not come in as strong as planned simply given the slowdown that is affecting all segments of the industry (albeit PC segment has been hit the hardest). I think the symbios acquisition will provide the screen for not being able to achieve current Q3 and Q4 expectations, so if orders in this qtr can at least keep Q3 rev flat to slightly up vs Q2 and if new products (dcam and dvd) can provide enough revenue lift in Q4 to offset the large increase in expenses associated with the Gresham fab opening the report should be positively received. In addition, 1999 estimates won't be hurt too badly if LSI can sell the symbios deal as accretive (at this point it doesn't matter if it will be or not, just what they say about it). The bottom line is LSI does the majority of their talking during these calls, so with the stock in a basing pattern the tone of the news will indicate which way it breaks. At this point it is pure wishful thinking regarding what they may say about Q3, they just aren't talking enough for anyone to have a good read on it and that is why the stock is doing nothing IMO. If the stock goes up before the call I won't wait around for the news, but if it stays in this range it is worth the risk to hold through the call because the downside seems reasonably limited. All this is just my opinion of course,

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