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

To: Dan Spillane who wrote (22452)	7/26/2000 1:46:29 PM
From: michael97123	Read Replies (1) \| Respond to of 25814

Point taken! Semis as a group have been choppy. Am hoping group holds up here. My post was addressed to ML analyst "reasonable" look at the situation. What I meant by reasonable was that he did not downgrade like SSB. If that 20mm shortage were included LSI would have just met eps numbers for what it added would be subtracted out by investment earnings which is about a wash. Anyway this has been a terrible period for me in the market. There is no way this quarter could justify a 50% drop in one week.

To: Dan Spillane who wrote (22452)	7/26/2000 2:03:17 PM
From: Maverick	Read Replies (1) \| Respond to of 25814

HQ:B/B>1,strong bookings in 7/00,strong 2H,BUY,tgt$65 Date: 7/26/00 LSI 2Q:00: In Line Quarter; Lowering Our Price Target to $65 from $90. * LSI reported 2Q:00 revenues of $644.3 million, up 4.7% q/q, missing our top line estimate of $670.5 million. EPS for the quarter before goodwill was $0.29, which met both our and consensus EPS estimates of $0.29. Gross margins of 42.9% were up 50 basis points q/q due to improved utilization in the company's fabs and the ongoing ramp at Gresham. * We believe the book-to-bill for the quarter was solidly above 1. 1Q:00 bookings set a new record for the company. We believe that the momentum of strong bookings has continued into the month of July thus far. * Increased order momentum (primarily in the 0.25 & 0.18 products) is causing the company to pull in its capacity ramp plans at Gresham by 6 months causing the company's GMs to ramp at a slower pace for the balance of this year and next Vs previous guidance. * Moving forward, we are slightly tweaking down our revenue numbers while keeping our old EPS numbers primarily by lowering the operating expenses to compensate for lower guided GMs. * Communication revenues in the quarter (networking, broadband including optical switching, wireless, set top-boxes, etc.) continues to grow at a faster than previously anticipated pace. The company's communications business is now expected to grow to 50% of total revenues by end of the current quarter Vs previous expectations of getting there by year end. * We will look to incrementally get more positive on the story during the second half as a lot of the currrent bookings transform into higher than expected revenues. * We are maintaining our BUY rating and are lowering our price target from $90 to $65. 2000 E Previous Est 2001 E Previous Est Q1 EPS $0.26A $0.26A $0.39 $0.39 Q2 EPS 0.29A 0.29A 0.43 0.43 Q3 EPS 0.32 0.32 0.47 0.47 Q4 EPS 0.37 0.37 0.51 0.51 FY EPS 1.24 1.24 1.80 1.80 FY REVS (M) 2,775.5 2,813.6 3,720 3,787 CY EPS 1.24 1.24 1.80 1.80 CY P/E 33 33 23 23 FY Ends Dec Current Price $41.00 52-Week Range $21-90 Market Cap (M) $14,478 Shares Out (M) 353,120 Book Value $6.14 Net Cash/Share $2.67 P/S Ratio LTM 6.1 P/S Ratio FTM 4.5Balance Sheet Cash at the end of 2Q:00 increased to $942.5 million up from $868.2 million in the prior quarter. Inventory days increased to 71 days, up from 66 days in the prior quarter. DSOs decreased to 56.5 from 58.7 q/q.