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Technology Stocks : LSI Corporation -- Ignore unavailable to you. Want to Upgrade?

To: Ross who wrote (22415)	7/26/2000 2:19:47 AM
From: Charles Tutt	Read Replies (1) \| Respond to of 25814

I haven't listened, so don't know for sure, but "SAN" might be "Storage Area Network," a storage architecture becoming popular +/-.

To: Ross who wrote (22415)	7/26/2000 2:26:01 AM
From: uu	Read Replies (1) \| Respond to of 25814

Ok here is the report that just came out from B. T Alex Brown (my favorite group of analysts who had a sell on LSI Logic when it was at $11/shr (pre-split)). Basically they dont want to make an ass out of themselves by telling everyone to go ahead and sell, and at the same time they do not want to go head-to-head with their colleague con-artists working hard at Smith&Barney. So they remain vague and ambigious (sort of like how politicians behave during their political campaigns): Anyway, here is Alex Brown's brokerage house analytical mind on LSI Logic's Q2 performance: ================================================ LSI Logic missed top line forecasts in the second quarter with sales of only $644 million - compared to our estimate of $676 million. This represents less than a 5% sequential increase. According to management the primary cause of the top line shortfall was a $20 million slip of sales from the end of June into July. The reason for the slip was explained as relating to issues in supply chain management and problems with component shortfalls. Management indicated that they did not realize that certain products were being shipped in July rather than the end of June until the last day of the quarter and there was no way to remedy the problem. In addition, there was no way to indicate to the street that there was a problem since the company was already in its quiet period. In addition, tight supplies of key components such as capacitors and oscillators were a problem. Our view is that the shortfall partly relates to the company’s particularly high exposure to the Japan market, which continues to be negatively impacted by slower economic growth in the region. LSI Logic has over 30% of its sales on average coming from Japan, compared with around 20% for the entire industry. The gross margin continues to improve but at a slower rate due to greater spending at the company’s new fab in Gresham, Oregon. The gross margin was 42.9% in the quarter. Overall spending was generally lower than we expected in the operating lines. Earnings per share then were $0.29, and were in line with expectations. Revenue growth targets are still on target for the entire year. LSI believes that sales growth will be in the 10-12% range for the third quarter and a similar level for the fourth quarter. The slippage of the $20 million in the second quarter will be recovered in the third quarter. The problem is that the overall sales targets are not going up dramatically as is the case with most semiconductor companies. We believe that this lack of upward revisions relates to the company’s high exposure to the Japanese markets. In addition, we believe that the company has not been immune to difficulty in securing foundry capacity. The company will work to ramp its new Gresham facility, but that will prevent the gross margin from rising faster. Tighter controls will be implemented on the research and development costs to keep the operating margin on the rise. Despite these difficulties, we believe that LSI has an outstanding backlog of design wins with top customers such as Sun, Cisco and Sony. We think that the operational issues which hurt the company in the second quarter are largely behind the company. We also believe that the Japan market will show seasonal improvement in the second half. Overall, our earnings per share estimate are increasing but not at the rate that we had anticipated. Our new 2000 earnings per share estimate is now $1.22 and for 2001 our new estimate is $2.00. We have lowered our stock price target to $56, or 28 times our 2001 estimate. Our code remains strong buy, though we recognize that there will be weakness in the shares for the near term. Moreover, we would not expect the stock to re accelerate until management proves it can execute according to plan and deliver results that exceed the high expectations of semiconductor analysts and investors. ===================================== One thing I am amazed is how the same analysts lookin at the same Company can come up with 2 different target numbers for the stock. SSB has a 12-18 months target price of $40/shr, while B.T Alex Brown has a target price of $56/shr! Now that is quite a big difference!! On a seperate subject can anyone truly tell me how does one become an analyst?! I mean is it something one comes to want from early childhood or is it something that develops as one grows into the mean cruel world and probably is a manifestation of having abusive parents doing all types of horrible things to him/her at young age?!!

To: Ross who wrote (22415)	7/26/2000 2:29:35 AM
From: uu	Respond to of 25814

Ok here is the report that just came out from B. T Alex Brown (my favorite group of analysts who had a sell on LSI Logic when it was at $11/shr (pre-split)). They do maintain a Strong Buy on the stock, but you read their report and perhaps you can tell me how can they maintain a Strong Buy after giving such a poor report on Company's performance!!! It seems like they dont want to make an ass out of themselves by telling everyone to go ahead and sell, and at the same time they do not want to go head-to-head with their colleague con-artists working hard at Smith&Barney. So they remain vague and ambigious (sort of like how politicians behave during their political campaigns). Anyway, here is Alex Brown's brokerage house analytical mind on LSI Logic's Q2 performance: ================================================ LSI Logic missed top line forecasts in the second quarter with sales of only $644 million - compared to our estimate of $676 million. This represents less than a 5% sequential increase. According to management the primary cause of the top line shortfall was a $20 million slip of sales from the end of June into July. The reason for the slip was explained as relating to issues in supply chain management and problems with component shortfalls. Management indicated that they did not realize that certain products were being shipped in July rather than the end of June until the last day of the quarter and there was no way to remedy the problem. In addition, there was no way to indicate to the street that there was a problem since the company was already in its quiet period. In addition, tight supplies of key components such as capacitors and oscillators were a problem. Our view is that the shortfall partly relates to the company’s particularly high exposure to the Japan market, which continues to be negatively impacted by slower economic growth in the region. LSI Logic has over 30% of its sales on average coming from Japan, compared with around 20% for the entire industry. The gross margin continues to improve but at a slower rate due to greater spending at the company’s new fab in Gresham, Oregon. The gross margin was 42.9% in the quarter. Overall spending was generally lower than we expected in the operating lines. Earnings per share then were $0.29, and were in line with expectations. Revenue growth targets are still on target for the entire year. LSI believes that sales growth will be in the 10-12% range for the third quarter and a similar level for the fourth quarter. The slippage of the $20 million in the second quarter will be recovered in the third quarter. The problem is that the overall sales targets are not going up dramatically as is the case with most semiconductor companies. We believe that this lack of upward revisions relates to the company’s high exposure to the Japanese markets. In addition, we believe that the company has not been immune to difficulty in securing foundry capacity. The company will work to ramp its new Gresham facility, but that will prevent the gross margin from rising faster. Tighter controls will be implemented on the research and development costs to keep the operating margin on the rise. Despite these difficulties, we believe that LSI has an outstanding backlog of design wins with top customers such as Sun, Cisco and Sony. We think that the operational issues which hurt the company in the second quarter are largely behind the company. We also believe that the Japan market will show seasonal improvement in the second half. Overall, our earnings per share estimate are increasing but not at the rate that we had anticipated. Our new 2000 earnings per share estimate is now $1.22 and for 2001 our new estimate is $2.00. We have lowered our stock price target to $56, or 28 times our 2001 estimate. Our code remains strong buy, though we recognize that there will be weakness in the shares for the near term. Moreover, we would not expect the stock to re accelerate until management proves it can execute according to plan and deliver results that exceed the high expectations of semiconductor analysts and investors. ===================================== One thing I am amazed is how the same analysts lookin at the same Company can come up with 2 different target numbers for the stock. SSB has a 12-18 months target price of $40/shr, while B.T Alex Brown has a target price of $56/shr! Now that is quite a big difference!! On a seperate subject can anyone truly tell me how does one become an analyst?! I mean is it something one comes to want from early childhood or is it something that develops as one grows into the mean cruel world and probably is a manifestation of having abusive parents doing all types of horrible things to him/her at young age?!!

To: Ross who wrote (22415)	7/26/2000 2:30:48 AM
From: uu	Respond to of 25814

Ok here is the report that just came out from B. T Alex Brown (my favorite group of analysts who had a sell on LSI Logic when it was at $11/shr (pre-split)). They do maintain a Strong Buy on the stock (not that it is at $81/shr pre-split!!), but you read their report and perhaps you can tell me how can they maintain a Strong Buy after giving such a poor report on Company's performance!!! It seems like they dont want to make an ass out of themselves by telling everyone to go ahead and sell, and at the same time they do not want to go head-to-head with their colleague con-artists working hard at Smith&Barney. So they remain vague and ambigious (sort of like how politicians behave during their political campaigns). Anyway, here is Alex Brown brokerage house's analytical mind on LSI Logic's Q2 performance (and more)!: ================================================ LSI Logic missed top line forecasts in the second quarter with sales of only $644 million - compared to our estimate of $676 million. This represents less than a 5% sequential increase. According to management the primary cause of the top line shortfall was a $20 million slip of sales from the end of June into July. The reason for the slip was explained as relating to issues in supply chain management and problems with component shortfalls. Management indicated that they did not realize that certain products were being shipped in July rather than the end of June until the last day of the quarter and there was no way to remedy the problem. In addition, there was no way to indicate to the street that there was a problem since the company was already in its quiet period. In addition, tight supplies of key components such as capacitors and oscillators were a problem. Our view is that the shortfall partly relates to the company’s particularly high exposure to the Japan market, which continues to be negatively impacted by slower economic growth in the region. LSI Logic has over 30% of its sales on average coming from Japan, compared with around 20% for the entire industry. The gross margin continues to improve but at a slower rate due to greater spending at the company’s new fab in Gresham, Oregon. The gross margin was 42.9% in the quarter. Overall spending was generally lower than we expected in the operating lines. Earnings per share then were $0.29, and were in line with expectations. Revenue growth targets are still on target for the entire year. LSI believes that sales growth will be in the 10-12% range for the third quarter and a similar level for the fourth quarter. The slippage of the $20 million in the second quarter will be recovered in the third quarter. The problem is that the overall sales targets are not going up dramatically as is the case with most semiconductor companies. We believe that this lack of upward revisions relates to the company’s high exposure to the Japanese markets. In addition, we believe that the company has not been immune to difficulty in securing foundry capacity. The company will work to ramp its new Gresham facility, but that will prevent the gross margin from rising faster. Tighter controls will be implemented on the research and development costs to keep the operating margin on the rise. Despite these difficulties, we believe that LSI has an outstanding backlog of design wins with top customers such as Sun, Cisco and Sony. We think that the operational issues which hurt the company in the second quarter are largely behind the company. We also believe that the Japan market will show seasonal improvement in the second half. Overall, our earnings per share estimate are increasing but not at the rate that we had anticipated. Our new 2000 earnings per share estimate is now $1.22 and for 2001 our new estimate is $2.00. We have lowered our stock price target to $56, or 28 times our 2001 estimate. Our code remains strong buy, though we recognize that there will be weakness in the shares for the near term. Moreover, we would not expect the stock to re accelerate until management proves it can execute according to plan and deliver results that exceed the high expectations of semiconductor analysts and investors. ===================================== One thing I am amazed is how the same analysts lookin at the same Company can come up with 2 different target numbers for the stock. SSB has a 12-18 months target price of $40/shr, while B.T Alex Brown has a target price of $56/shr! Now that is quite a big difference!! On a seperate subject can anyone truly tell me how does one become an analyst?! I mean is it something one comes to want from early childhood or is it something that develops as one grows into the mean cruel world and probably is a manifestation of having abusive parents doing all types of horrible things to him/her at young age?!!