M,
Good job on the notes from the last call. Just a few things to add:
1) LSI hasn't sold any gsm parts yet and no design wins have been announced. GSM revenues always seem to be 6 months out. During Q1, he said they would be in second half 98. I think they have slipped to 1st half 99 now.
2) DVD and DCAM are just now shipping. They expected "high single digits" from them this year as % of total sales. Given the very disappointing DVD environment and Japan economy, I think that number has to come down to 5% at best
3) Telecom was at an alltime high, not wireless. Telecom is mostly telephone equipment companies. Again, LSI has no meaningful wireless business right now as I understand
4) Most important of all, Corrigan had a very similar list in April of 1997 as you recall. Then the debactle of october hit when none of the expectations could be attained. This is likely why the stock isn't moving now. People see that the fab is now equiped, lines are being commissioned, the place is fully staffed. They can't delay the opening much longer, so if those hoped for revenues don't come through, earnings will go to almost nothing in a heart beat. I personally don't believe that will happen, but given LSI's track record plus the industry wide slowdown there are a lot of doubters out there. Confirmation that business will grow sufficiently to cover these new fixed costs in the shortrun is what is required to get this damn thing moving. LSI put this thing in pergatory by refusing to shed meaningful light on that topic. On the 23rd the light will be turned on, but it should have been burning throughout the whole qtr IMO because this issue is so critical to the company and how it is perceived. That was the message that the analysts and investors gave to lsi in october of last year, but I don't think they heard it. |
