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.

Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: Jurgis Bekepuris who wrote (52736)	10/2/2002 5:34:16 PM
From: Eric L	Read Replies (2) \| Respond to of 54805

re: ARM Holdings (ARMH) Bought some ARMHY today. After or bfore the warning? >> ARM Holdings Warns 3rd-Quarter Results Will Miss Estimates Nic Fildes London Dow Jones Newswires October 2, 2002 Shares in United Kingdom semiconductor designer ARM Holdings PLC fell sharply Wednesday after the company finally followed peers and warned its third-quarter profit would be well below expectations. ARM, until Tuesday the darling of the U.K. technology sector, said revenue in the three months ended Sept. 30 would be around 33 million British pounds ($51.7 million) and pretax profit around eight million pounds. The figures are well below consensus expectations for revenue of 44.5 million pounds and pretax profit of 16 million pounds. The revision is due to the weak U.S. dollar and deteriorating market conditions, which have led partners to defer investment decisions, slowing down licensing activity, ARM said. ARM said that, although the fourth quarter is traditionally stronger than the third, no significant upturn is expected this year. Both revenue and profit are expected to be flat. "It's really the case of the last man standing," Nomura Securities analyst Keith Woolcock said. "ARM is one of the only tech stocks in Europe yet to warn on profits," he said. "This is a very important day as ARM has always been the high-water mark for the U.K. tech sector," Mr. Woolcock added. The market agreed, selling the stock down 62% to 47.5 pence in morning trading. "It's the worst-ever downturn in the semiconductor industry and it has caught up with ARM," Chief Executive Warren East said. "We are positive in the long term, but in the short- to medium-term, we have to be pessimistic," he said. WestLB Panmure analyst Robin Hardy said the market was taken by surprise, as news in the sector had been positive after good results from Micron Technologies Inc. and Qualcomm Inc. (NasdaqNM:QCOM - News) in the U.S. He said he will become more cautious on the stock and believes it will take two solid quarters for the market to regain trust in ARM. Goldman Sachs cut its rating on ARM to "market perform" from "trading buy," saying conditions are weaker than expected, and investors will focus on balance sheet issues and the apparent lack of seasonality. The broker noted the particularly large drop in deferred revenue and downtick in backlog, and neither fourth-quarter wireless seasonality nor the company's ability to deliver on the balance sheet seem to be materializing near term. Nomura's Woolcock pointed to murky visibility as a concern, adding that management might be blamed by some investors for being too optimistic in previous earnings projections. Mr. East said pricing pressure in the third quarter was significant, adding, " We chose to hold onto our pricing and not mortgage our future." He said the company has stopped hiring, although it doesn't plan to shed any of its 800 staff, and is aiming to speed up new product releases. It has also initiated an expense review to ensure profitability going forward, he said. Mr. East said the company will remain profitable for the year and pointed to cash balances that are likely to increase to around 121.7 million pounds in the third quarter from 115.4 million pounds at the end of June. << - Eric -

To: Jurgis Bekepuris who wrote (52736)	10/2/2002 6:52:43 PM
From: russwinter	Respond to of 54805

I'm in too. This poster comments on the conference call. Recs were down, how much he didn't say, but worth mention and that's good. Problems seems to be lumpiness (or more permanent "delays"?) in order closing. You hear that a lot on these calls now. It's looks like every customer for tech on the planet has decided not to order anything in the 3rd quarter. Is this permanent or could a catchup be unleashed? Whatever, tech investors need to get ready for lumpy, not linear quarters, which in reality is how it's always been (minus the 98-00 strangeness). The suggestion from the call is that ARMHY's competitive position is getting even stronger as others drop by the wayside. messages.yahoo.com