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Technology Stocks : The New QLogic (ANCR) -- Ignore unavailable to you. Want to Upgrade?

To: Kerry Lee who wrote (28788)	7/25/2001 1:51:17 PM
From: trendmastr	Respond to of 29386

Thanks to uptech: QLogic (QLGC) Price: $40.74 Buy F01E: $1.03 F02E: $0.85 G Ingalls QLogic reported EPS that matched our $0.23 consensus estimate. Fibre Channel revenue was stronger than anticipated, up 10% quarter over quarter, but a 27% quarter-over-quarter decline in QLogic's SCSI business resulted in overall revenue coming in $2 million below our $94 million estimate. QLogic underscored that it has seen no pricing pressure on any of its HBA, switch and I/O controller products. Gross margin was one-tenth of a point better than we expected. Management reduced guidance on continued SCSI weakness as disk-drive manufacturers work through excess inventory. We think the worse-than-anticipated decline in the SCSI business reflects storage slowing earlier in 2001, but does not suggest it is now slowing further. Our Fibre Channel numbers come down only slightly. We think the results are consistent with our thesis that fundamentals are taking longer to get better, but not getting worse. We remain optimistic about a 2002 SAN recovery. We are revising our year-end price target from $65 to $50 on lower C02 numbers. The new target represents a P/E of 47 on our $1.07 C02 estimate. QLogic could see pressure as numbers come down to what we view as very conservative levels. Selling should be mitigated by the strong Fibre Channel showing. We are buyers of the stock under $40.