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 : Advanced Micro Devices - Moderated (AMD) -- Ignore unavailable to you. Want to Upgrade?

To: tejek who wrote (52088)	8/22/2001 9:53:23 PM
From: AK2004	Respond to of 275872

Ted re: .5% of GTW's business is 25% of AMD sales? sorry, what I meant to say that if intel would through everything at AMD and AMD would loose not much more than 5% of market share after few quarters of fighting than it is equivalent to amd's victory. 5% of total market share = 1/4 of current amd market share. re: Did you know that the S&P cut GTW to junk bond status tonite? no I did not, I'll take a look at them. Worth noticing though that amd's long term was junk as well. Thanks for the info Regards -Albert

To: tejek who wrote (52088)	8/22/2001 10:01:49 PM
From: AK2004	Read Replies (2) \| Respond to of 275872

Ted, All, Something is definitely wrong here but take a lok at the bold part that just simply can not be true but if it is true then ibm and gtw are simply a non-issue Regards -Albert 07:23am EDT 21-Aug-01 Salomon Smith Barney (Richard Gardner +1-415-951-1669) CP The PC Beat (Part 1 of 2) SALOMON SMITH BARNEY Industry Note PCs The PC Beat August 21, 2001 SUMMARY * Dell surprised the Street with a downward Richard Gardner revision to October quarter revenue and earnings +1-415-951-1669 guidance last Thursday. The company now expects richard.gardner@ssmb.com revenue to be flat to down 5% sequentially versus Cynthia Hiponia Street expectations of flattish to up 5%. The +1-415-951-1624 company expects earnings to be $0.15-0.16, one to cynthia.s.hiponia@ssmb.com two pennies below consensus. Unit shipments should Chris Noser rise in 3Q, but average selling prices may decline +1-415-951-1731 another 3-6% qoq following a 7% qoq decline in 2Q. * HP, on the other hand, believes its revenue will rise modestly in 3Q. Mgmt attributed the discrepancy between its guidance and Dell's to differences in customer, product and geographic exposure. We believe channel fill associated with the XP launch in October will also contribute a slight boost to HP's October results. * In general, US retail data, channel checks and last week's earnings reports offer few signs of improvement in PC demand. PC DATA POINTS FOR THE WEEK OF 8/13 - 8/19 DELL REPORTS IN LINE 2Q; PROVIDES GLOOMY 3Q OUTLOOK Dell reported 2Q01 results last Thursday. Revenue of $7.6B (-1% yoy, -5% qoq) and EPS of $0.16 (-28% yoy) were in line with revised guidance. Mgmt commented that US demand remains lackluster, but that US consumer, government, Germany, China and Japan represented bright spots (which we attribute to share gains by Dell more than overall market strength). Geographically, China posted the strongest growth (+31% yoy) while the Americas posted the weakest results (-3% yoy). On the product front, combined server, storage and workstation revenue of $1.4B (+8% yoy, -1% qoq) fell short of our estimate due to both lower units and lower average selling prices while desktop revenue of $3.55B (-2% yoy, -6% qoq) exceeded our estimate due to higher units partially offset by lower ASPs. Dell achieved 19% yoy and 1% qoq growth in unit shipments in 2Q versus a 3% yoy decline for the industry. This respectable unit growth, however, was offset by a whopping 17% yoy and 7% qoq decline in average selling prices. CFO Jim Schneider commented that component costs, which represent close to 90% of the company's COGS, continue to decline about 1% per week and Dell remains extremely proactive in passing these savings through to customers in order to continue gaining share. The fact that Dell's gross margins fell 50bp qoq in a very favorable cost environment and that the company still only achieved the low-end of revenue guidance for the quarter is an indication of just how tough the current demand and pricing environment remains. Dell mgmt commented that it expects industry unit shipments to be flat or down 5% qoq in 3Q---we had been estimating a 5% qoq increase, but we concede that our numbers may be a bit high for the following reasons. On the demand front, we believe many consumers will defer PC purchases until the Oct 25 launch of Windows XP, and that Europe and Asia will continue to deteriorate. On the supply front, we believe indirect PC vendors (CPQ, HP, EEEE) will sharply reduce shipments into the channel during August and September in order to reduce non-XP channel inventories. In addition to lackluster unit growth, Dell expects industry average selling prices to decline another 3-6% qoq, resulting in a 5%-10% qoq decline in worldwide PC revenue during 3Q. Because of declining average selling prices, Dell expects its own revenue to decline 0-5% qoq in 3Q versus the Street's expectation of flattish to up slightly. EPS guidance of $0.15-0.16 was also $0.01-02 below consensus. HWP REPORTS 3Q01 PERFORMACE - OUTLOOK SLIGHTLY LESS DOWNBEAT THAT DELL'S Hewlett Packard (HWP# - $24.74,1M) also reported 3FQ results last Thursday--- the results were slightly above revised guidance. Back in January, CEO Carly Fiorina commented that HP saw consumer purchases fall off sharply in January, followed by a decline in business IT spending. On last week's call, Fiorina commented that HP experienced yet another dramatic slowing in consumer sales during May-July, followed by yet another "ratcheting down" in business IT spending. Fiorina also commented that HP sees signs of further weakening in Asia Pacific and Latin America. HP management expects revenue to rise sequentially in the October quarter. Rather than a sharp re-acceleration in business or consumer IT spending, however, Fiorina was careful to characterize any likely 3Q pick-up as 'subdued'. HP's third quarter guidance was difficult to reconcile with Dell's---recall that Dell guided third quarter revenue flat to down 5% sequentially. HP attributed the disparity to differences in product, customer and geographic exposure. We would add yet another factor---HP will begin filling retail shelves with XP-based PCs in late September after shipping few systems in May- July when it was attempting to reduce non-XP channel inventories NVIDIA CHIMES IN nVidia (NVDA: $83.19, NR) reported 2Q results on August 14. nVidia is the leading supplier of graphics processors worldwide. The company expects a seasonal pick-up in shipments following Intel's August 26 price cuts. The company also commented that it is on schedule to release graphics processors for the Xbox launch in early November. MSFT TO FACE REMEDY AND TYING PROCEDINGS ON SCHEDULE On August 17, the US Court of Appeals denied Microsoft's request for a delay of further District Court proceedings in the Antitrust Trial. Recall that MSFT appealed its case to the Supreme Court on August 7 citing the appearance of bias on the part of Judge Jackson. At that time, MSFT requested that the Appeals Court delay any further District Court proceedings on tying and remedies until the Supreme Court decided whether to hear the case. Microsoft's request was criticized by the District Court as a stalling tactic. We view this as a minor negative for Microsoft for two reasons: 1) a delay would have given the company time to formulate strategy for the next round(s) of litigation; and 2) if the Supreme Court decides to hear the case, any further proceedings at the District Court level will prove a waste of time and money. U.S. RETAIL UPDATE Below, we review the most recent data from PC Data. PC Data tracks PC sales out of 50-60% of all major US retail outlets using actual cash register receipts. We consider this data to be a good proxy for the US consumer PC market (which represents 40% of the total US market and roughly 15% of the worldwide market), with the caveat that Dell is taking market share from retail and is not included in the data. We do not consider this data to be a good proxy for the total US or worldwide PC markets. DESKTOPS US retail desktop shipments declined 21% yoy during the week beginning July 29. Desktop shipments increased 9% week on week---the third straight week of sequential improvement. We expect US retail shipments to remain weak in August and September ahead of the October launch of Windows XP. WEEKLY DESKTOP SHIPMENTS YR/YR GROWTH BY PRICE POINT - U.S RETAIL Week Beg. 6/10 6/17 6/24 7/1 7/8 7/15 7/22 7/29 $599 and below -49% -53% -69% -30% -79% -63% -63% -58% $600 - $999 33% 23% 37% 37% 33% 6% 82% 89% $1000 - $1499 -33% -41% -55% -46% -53% -40% -42% -23% $1500 and above -6% -20% -35% -67% -46% -44% -47% -65% Market Growth -15% -18% -31% -24% -46% -38% -35% -21% Source: NPD Intelect and Salomon Smith Barney WEEKLY DESKTOP SHIPMENTS WK/WK GROWTH BY PRICE POINT - U.S. RETAIL Weekly Sequential Growth 6/10 6/17 6/24 7/1 7/8 7/15 7/22 7/29 $599 and below -14% -37% -2% 114% -58% 91% 30% -6% $600 - $999 37% -8% 5% -33% 15% 8% 1% 25% $1000 - $1499 -37% -11% 6% 40% -3% 1% 34% 5% $1500 and above 136% -27% 1% -14% 28% -16% -9% -8% Total 6% -17% 4% 5% -14% 19% 15% 9% Source: NPD Intelect and Salomon Smith Barney WEEKLY DESKTOP SHIPMENTS MARKET SHARE BY VENDOR - U.S. RETAIL Week Beg. 6/10 6/17 6/24 7/1 7/8 7/15 7/22 7/29 APPLE 3% 3% 3% 2% 3% 2% 2% 3% COMPAQ 31% 25% 40% 18% 36% 30% 47% 23% EMACHINES 14% 15% 14% 15% 17% 14% 8% 14% HWP 41% 43% 31% 46% 42% 42% 31% 56% Other 12% 14% 12% 18% 3% 12% 11% 5% Top 4 Aggr. Market Share 88% 86% 88% 82% 97% 88% 89% 95% Source: NPD Intelect and Salomon Smith Barney PORTABLES US retail portable shipments grew 17% yoy and 10% wow during the week beginning July 29. Portables continue to outperform desktops, but once again, we see potential for shipments to weaken again ahead of the October launch of Windows XP. WEEKLY PORTABLE SHIPMENTS YR/YR GROWTH BY PRICE POINT - U.S. RETAIL Week Beg. 6/10 6/17 6/24 7/1 7/8 7/15 7/22 7/29 $999 and below 102% 142% 429% 92% 47% 104% 97% 148% $1000 - $1499 11% -45% -16% 12% 16% 26% 35% 25% $1500 - $1999 64% 63% 41% 70% 0% 40% -3% 57% $2000 - $2999 -44% -38% -30% -48% -47% -31% -39% -35% $3000 and above -38% -38% -79% -41% -59% -55% -45% -76% Market Growth 13% -5% 16% 8% -10% 13% 3% 17% Source: NPD Intelect and Salomon Smith Barney WEEKLY PORTABLE SHIPMENTS WK/WK GROWTH BY PRICE POINT - U.S. RETAIL Week Beg. 6/10 6/17 6/24 7/1 7/8 7/15 7/22 7/29 $999 and below 7% -6% 79% -69% 23% 23% -8% 12% $1000 - $1499 19% -42% 39% 19% 10% 7% 27% -14% $1500 - $1999 12% -14% 6% -10% -23% 37% -12% 49% $2000 - $2999 37% -6% 40% -37% 17% 15% -3% 27% $3000 and above 8% -6% -64% 108% 6% 19% 5% -73% Market Growth 16% -19% 30% -23% 0% 19% 4% 10% Source: NPD Intelect and Salomon Smith Barney