Slowthinker, Given Boise's terrible execution last quarter, and assuming they have worked the kinks out, 40-50% seems doable. I don't think that will translate into 50% higher revenue, as last quarter was helped immensely by a high mix of 16mb parts selling for a premium price, but revenue will be nicely higher. The analysts do seem pretty intent on keeping the bar low enough for MU to beat the estimates. During FYQ1, MU's megabits shipped dropped 10% (effectively removing TXN totally) and supply and demand came into balance. Current demand seems to be stronger than is normal, but a jump of 50% in MU's output is still a big increase on the supply side. I have read that MU memory is showing up on the spot market. Perhaps LG's troubles will allow the market to absorb the extra supply with no pricing pressure, we shall see. Business PC sales are not doing well, and with consumer sales gravitating to the low end, I remain a skeptic on the matter of demand growth exceeding supply. And even if it does longer term, all it takes is one inventory correction by PC makers to cause a collapse in DRAM demand and pricing.
The other bearish argument that I find convincing is valuation. The stock price seems pretty far ahead of itself, given the very uncertain nature of earnings estimates further in the future than next quarter. The flood of 144s would argue the insiders are in agreement.
I am glad to see that you are continuing to post, despite some recent unsavory responses. You have added many well reasoned, intelligent arguments to the debate, that I for one, have found very valuable.
Regards, Dave |
