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Technology Stocks : LSI Corporation
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To: DavidG who wrote (13883)7/25/1998 12:59:00 AM
From: Jock Hutchinson  Read Replies (2) of 25814
 
David: I went over the April CC notes. Wilf indicated that the most recently completed quarter would see a gain in revenue of 3-5%. We saw a gain of 2% despite the huge devaluation of the Yen, and the decline in revenues in June. Wilf also foresaw a slight gain in earnings for this quarter, and that is prcisely what we got. Wilf is credible in a business where it isn't all that easy to make accurate forecasts.

K of course has got it wrong again. I would say that K is the one who needs to listen again to the conference call, but we know by now that he deliberately misrepresents the truth if it suits his purpose, which whatever it is, is not consistent with an investor who owns 75,000 shares of LSI Logic. The reason that margins will be lower for the 4th Q is because of Gresham coming on line. The reason that Gresham is coming on line is because LSI needs the capacity, since they are already operating at 90% capacity during what is clearly the trough of the semi cycle. Gresham has already been factored into Wilf's statement that 4Q will have higher earnings despite a lower GM. K is also wrong about DCAM and DVD tailing off in 4Q. Wilf specifically indicated to Mark Edelstone that he expected no seasonality with either the DCAM or DVD and that turns was a real possibility.

So it would appear that we have K's word versus Wilf's word. I'll take Wilf's.
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