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Technology Stocks : LSI Corporation
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To: Hightechhooper who wrote (13858)7/24/1998 12:54:00 AM
From: Tech Watcher  Read Replies (2) of 25814
 
I'm still trying to figure out K.

Josh, David et al have kept him pretty well in check, but it is now my turn.

Q4 will be just too scarey (sic) for
people to get out in front of IMO. I expect Q3 estimates to fall to the 22 cent
range and Q4 fall to 18-20 cents. The fact that they are bringing that fab online in
q4 with no visibility into revenues is not good. That issue was the one that seemed
most important to the analysts.

Why would an analyst reduce their Q4 estimate to 18-20 cents after they have just received guidance from the company that it should exceed Q2 of 23 cents? The fact that LSI has turned the corner with a book to bill of 1 indicates they already have the orders to keep Q3 flat. Any general upturn could give them a little extra momentum going into Q4.

As far as bringing Gresham online with no revenue visibility, I refer you back to the book to bill and the fact they are already at plus 90% utilization. It looks to me that the timing is perfect. They won't have to shut down any lines to re-tool. Gresham will be equipped with state of the art equipment as needed to begin a new product cycle.
Hopefully Symbios will be able to also take advantage of this new capacity in the year to come for their growing industry.

I love it when a plan comes together!

- Tech Watcher
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