CREAF: CREATIVE GIVES UPBEAT PRESENTATION AT TECH '99 CONFERENCE; ANNOUNCES OEM WIN WITH GATEWAY; MAINTAINING LTA RATING
February 23, 1999
SYMBOL(S): CREAF
ANALYST(S): NILES, DANIEL
RATING: LTA
Synopsis:
The following synopsis is qualified in its entirety by the more detailed information contained in the full research report, including the discussion of certain risks associated with an investment in this security contained in "Investment Risks."
Research dated prior to September 1, 1998 was prepared by an entity that was acquired by BancBoston Robertson Stephens Inc.
Chairman and CEO Sim Wong Hoo and President Craig McHugh gave an upbeat presentation yesterday at the BancBoston Robertson Stephens Technology Conference.
The company "preannounced" an OEM design win for the new SoundBlaster Live! family of audio products, indicating that Gateway (GTW $82 ÿffffbd) would incorporate Live! audio and Creative speaker products into a number of its high-end models. This is in addition to today's public announcement that Micron (MUEI $15 1/16) would offer SoundBlaster Live! in its Millenia desktop systems.
We believe that these OEM wins for Live!-based audio products confirm our belief that Creative's OEM audio business has hit an inflection point, and we expect the company to make additional announcements of new OEM business over the next quarter.
Creative still faces a very difficult March quarter, as its 3D graphics business goes through the wrenching transition away from 3Dfx-based products, as DVD drive availability remains constrained, and as Latin American markets (accounting for as much as 10% of sales in recent periods) remain in free-fall.
We are increasingly, albeit cautiously, optimistic that all three key areas of Creative's business (Audio, CD/DVD, Graphics) can stage a strong recovery in the second half of C1999. For the present, we are maintaining our LTA rating, but would encourage investors with a longer-term investment horizon to accumulate shares now. |
