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Non-Tech : Auric Goldfinger's Short List -- Ignore unavailable to you. Want to Upgrade?

To: Sir Auric Goldfinger who wrote (7612)	3/15/2001 7:59:43 AM
From: gringodoc	Read Replies (2) \| Respond to of 19428

Congrats, Auric on another great call!! briefing.com on GSPN: 18:36 ET ****** GlobeSpan (GSPN) 24 5/8: This number one provider of DSL chip sets warned after the close today for Q1 and Q2 due to an inventory overhang and a slowing U.S. economy. GSPN now expects to report Q1 revenue in the $105-$115 mln range, which is a sequential decline of 12%-20%. EPS is expected to be $0.10-$0.13. Q2 revs are expected to be even lower than that at $100-$110 mln with EPS of $0.08-$0.10. So why is the stock selling off 17% in the after hours given the fact that so many chip stocks have warned recently? Because this was a big miss and it's extending for two quarters (and we believe possibly more). Q1 revs and EPS were expected to be $131 mln and $0.19 according to First Call. Customers repeatedly are requesting revisions and cancellations to their orders to balance their inventories. The plague, also known as DSL, has decimated the DSL service providers and is spreading to the DSL chip makers. Competitors, Analog Devices (ADI), Motorola (MOT) and Texas Instruments (TXN) have fallen for other reasons as they are more diversified than GSPN which is primarily a DSL chip company. GlobeSpan has been spared the complete decimation suffered by the DSL service providers because DSL demand has remained decent among companies that offer DSL services as part of an overall communication package. For example, Verizon (VZ) and SBC (SBC) continue to be large DSL providers to individuals and businesses. The problem is that too much equipment has been built. Customers of GSPN such as communication equipment manufacturers Cisco, Lucent and Nokia are experiencing inventory adjustments. On the positive side, management expects to resume growth in the second half of the year as its existing customers burn through their inventories, and new customers ramp in production, particularly in international markets. Longer term, GSPN should come out all right, but in the near term, there is little on the horizon to act as a catalyst. Even if we assume Q3 and Q4 estimates do not get reduced, GSPN is trading at a p/e over 30x. As a result, we prefer to analyze GSPN again later in the year. -- Robert J. Reid, Briefing.com