The conference call was VERY positive (or as exciting as Bailey and Sullivan get). 200 more design wins in the quarter and an expanding chip portfolio. The opportunities ahead of them are astounding and they went to great lengths to remind everyone that they are not just an ATM shop. Every major telecom and data networking deal (ATT/TCI, Sprint, LU, US West, Williams, Qwest, Level 3)all will involve PMC chips. They in fact made the statement, that "you cannot cross the internet without touching many of our chips."
They are receiving strong feedback on all lines and accordingly stepping up R&D. When customers come to you and say in effect "you're my guy, I need this and this and this, now lets design it and bring it to production" do you say sorry - I have to watch my bottom line for Wall Street? Of course not - we are seeing the seeds that will grow a forest down the line.
In the meantime, new products are selling very well (proving that previous R&D does indeed provide increased revs)and despite increased R&D and expected increased hiring, earnings will still be growing! Remember, a good portion (one analyst estimates 50%) of revs come from products 3-4 years old. Imagine what the almost 1000 design wins in the last year will do going forward!!
I agree with Youlu, get the weak and mo players out - this thing will be a gorilla in a few years. Todays action means nothing unless your time horizon is indeed 4:00 pm EST today.
Bulldozer |
