Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Network Appliance -- Ignore unavailable to you. Want to Upgrade?

To: techreports who wrote (8900)	8/6/2001 7:50:41 PM
From: Jacob Snyder	Respond to of 10934

More on Gross Margins: EMC had stable gross margins, from 1994-1999, between 44.9% and 52.1%. GM in 2000 was 58.0%, which was a lot higher than the previous pattern. IMO, GM of high-50s for EMC is probably not sustainable. A return to around 50% is more reasonable. But, depending on how long the current downturn lasts, GMs could go a lot lower, briefly (meaning for a year or two). For NTAP, gross margins have been more stable. There was no increase in 2000. The range has been very tight, 59.2%-59.3%, for 1999, 2000, and 2001 (FYE in April). Given the latest quarter-on-quarter slide in EMC's margins, from 55.1% to 47%, I think it is very unlikely NTAP can maintain 59% margins, over the next few quarters. Assuming you think there are bte in the industry, and storage isn't becoming a commodity, you've got to believe in a snap-back in margins once IT budgets come back.