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Technology Stocks : Creative Labs (CREAF)
CREAF 0.448-12.1%Dec 17 12:59 PM EST
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To: Fred Fahmy who wrote (11851)7/15/1998 8:43:00 AM
From: Savoirman  Read Replies (1) of 13925
 
Using management's guidance (which in these kinds of situations would tend to be more conservative) Q4 would probably be around .22-.25 I gather. I think Sim is well aware that any low-balling to dress up earnings for the future would just be counter-productive, especially since a warning came just barely two months after the previous guidance.

Revenue growth going forward would actually be quite easy, given the essentially flat FY98. Asia has been poor for six-seven quarters already, so no hurdles there. And things look better for the PC scene (CPQ seems to have its house in order, and HP just said today in Singapore it has NO inventory problems). And Creaf is going to launch its premiere product for the year at the beginning of the year. PC sales in Japan (where things are really dire) for the four weeks of June (in units) have been 32%, 16%, 23% and 15% up.

IMHO, I think the inventory correction in 2Q has understated real demand as the OEMs reduced shipments and sold from channel inventory. CPQ is going to say inventory is rock bottom (like that's any news now) and the rate of shipments will go back to near normal. Plus, seasonally Q3 is stronger than Q2. The only problem is the high base effect from last year's mad build-up towards the end of the year. That would make year-on-year comparisons look unimpressive.
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