SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Technology Stocks : LSI Corporation
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Jock Hutchinson who wrote (13904)7/27/1998 12:09:00 PM
From: Hightechhooper  Read Replies (4) of 25814
 
What I heard:

1) R&D / SGA flat spending for 2nd half vs Q2.

What this means:

1) GM will have to remain at Q2 levels (about $155M) in order to keep eps flat at .23 in Q4 (of course this assumes no changes in the tax rate, no material share repurchase and no material changes in other income / expense)

What else I heard:

2) GM % will fall BELOW Q1 levels of 43.6% due to the significant impact of the gresham startup (let's give lsi the benefit of the doubt and say 43% in Q4)

What this means:

2A) Sales need to be about $360 in Q4 (155/.43) simply to maintain eps in the .23 cent range.

2B) For eps to be .29, gm will have to grow AT MINIMUM by 10M to 165M. Using LSI margin guidance this implies sales of about $385M (165/.43)

What I heard:

3) Most of the impact of DVD in 1998 will be felt in Q3 (one can reasonably assume the same for DCAM)

What this means:

3) There are not enough major new products available to lift sales in Q4 by the $30M required to even keep eps flat at .23. The most likely scenario is for sales to increase modestly to $335 range resulting in eps in the upper teens at best.

Bottom Line:

1) This stock is a value play at these levels and will not get into any sustainable uptrend until clear signs of significant, consistent revenue growth are presence (i.e. Montgomery was right again)
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2026 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News