SGTL warns - gotta give 'em credit, the three analysts were right on the mark - just as they have been for the last year - it sure seems that the transparency in this segment is excellent otherwise I would not be able to explain how all three could get the story right...
biz.yahoo.com
SigmaTel Updates Guidance for First Quarter 2006
Wednesday March 29, 4:05 pm ET
AUSTIN, Texas--(BUSINESS WIRE)--March 29, 2006--SigmaTel Inc. (NASDAQ:SGTL - News), a leader in mixed-signal multimedia semiconductors, today announced that it expects revenue for the quarter ending March 31, 2006 to be in the range of $30 million to $35 million. Gross margins will be approximately 49%, plus or minus a percentage point for the quarter, which is lower than previously expected. Based on these revisions, both GAAP and pro forma net loss and loss per share will be considerably lower than the previous guidance that we provided on January 31, 2006. Contributing to the lower income is a negative impact on the Company's non-cash deferred income taxes, due to its international tax and IP migration strategy. This negative impact could be approximately $0.50 per share. The Company is evaluating alternatives relative to this tax strategy and is not providing specific revised EPS guidance at this time.
"Several factors have negatively impacted the company's results for the first quarter. First, one of our large customers' transition from the 3500 family to the 3600 family of portable multimedia SoCs proceeded more slowly than expected, causing the customer's 3600 orders to slip to the second quarter," reported Ron Edgerton, SigmaTel's president and CEO. Another factor was the market's slower than expected adoption of the STFM 1000 which was due to firmware issues and delays in reference designs. Consequently, the company's FM Tuner bundling strategy, which is being used to compete in the fiercely competitive low end of the market, was hampered. Finally, the availability of a complete hardware and firmware solution for the public casings customers created order delays. The company believes that it is successfully addressing these factors.
Another significant market factor affecting the company's performance was the precipitous declines in NAND flash prices. The company believes these declines caused OEMs to postpone orders from suppliers, resulting in lower than expected customer orders for SigmaTel's portable multimedia SoCs in the first quarter of 2006. Reports of independent industry experts indicate that 2 Gb NAND spot and contract prices have dropped over 40% since the beginning of the year. "The NAND pricing instability only exacerbates the typical seasonality for the MP3 market and customers have postponed ordering product until they have worked through their higher-priced inventory and NAND prices have stabilized," stated Ron Edgerton. "Customers have indicated that European demand could be as much as 40% lower in the first quarter compared to the fourth quarter of 2005. Regardless, our results are disappointing and we have put in place several initiatives to return SigmaTel to operational excellence."
The company has announced several management changes. Phil Pompa has been named Senior Vice President of Portable Systems Group with the goal of establishing the operational excellence that he brought to the Integrated Components Group. Steve Beatty will replace Pompa as the Senior Vice President of the Integrated Components Group and Danny Mulligan has been promoted to Senior Vice President of Operations and Technology. In addition, Jose Lau has been promoted to Senior Vice President of Asia.
SigmaTel Inc. has scheduled a conference call for 3:30 p.m. (CST) today to provide commentary and answer questions regarding the revised outlook. Investors may listen through the investor relations website at www.ir.sigmatel.com.
The conference call should be interesting - to say the least. Kinda surprised that the stock has not sold off more in AH action so far - maybe that will happen tomorrow.
Responding To Message #212 from Rutgers at 3/29/2006 12:48:11 PM
SGTL Update - from Tuesday night, March 28th's news - first, the Street's comments about the PR
SigmaTel (SGTL:Nasdaq - commentary - research - Cramer's Take) shares moved higher after the chipmaker said that MP MAN, a European electronics manufacturer, will move its entire portfolio of MP3 player offerings to the company's systems. MP MAN sells 31 different digital audio player models in Europe, the U.S. and Asia. SigmaTel shares rose 24 cents, or 2.4%, to $10.15 in late trading.
thestreet.com
Second, here's the PR:
MP MAN Makes the Switch to SigmaTel
Tuesday March 28, 4:08 pm ET
European MP3 Manufacturer Will Move 100% of Flash-Based Devices to SigmaTel
AUSTIN, Texas--(BUSINESS WIRE)--March 28, 2006--SigmaTel, Inc. (NASDAQ:SGTL - News), a leader in mixed-signal multimedia semiconductors, today announced that MP MAN, a leading European electronics manufacturer, will move their entire portfolio of MP3 player offerings to SigmaTel-based solutions. Currently MP MAN sells 31 different digital audio player models in Europe, the US and Asia.
"MP MAN has set the standard for MP3 players since 1997," said Jean Michel Estenne, CEO of MP MAN Europe. "We chose SigmaTel's technology to continue that trend well into the future. SigmaTel's quality and value are unmatched in the industry. They were the obvious choice for MP MAN."
"SigmaTel's superior technology and IP portfolio continue to lead the industry," said Ron Edgerton, chairman and CEO of SigmaTel. "MP MAN can count on us to provide high quality technology that delivers smaller form factors, better battery life and faster time to market."
MP MAN Europe supplies most of the major retail chain stores in Austria, Belgium, Denmark, France, Germany, Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain, Sweden, the United Kingdom, Iceland, Norway and Switzerland.
biz.yahoo.com
From Yaholigan: Here is a link to a British retailer which ranks 754 MP3 players by popularity. Look who's number one. AND number two. AND number three. (Shorts--you might want to turn away from this. You won't like what you're about to see)."
dooyoo.co.uk
finance.messages.yahoo.com.
My comment: Need to keep our fingers crossed, but the stock sure has fared well in the face of the three analysts who all cut targets as well as full-year down to either breakeven or a loss. Each time, the MM's took her below $10 and then she has positively responded. Hopefully, this will look like a low base on the one-year chart at the end of this year. Moreover, I really like the recent PR's - the latest one about MPMan and getting into the TV market - not bad, not bad at all. "Created as a cost effective audio solution for analog, digital and hybrid TVs, the highly integrated SGTV5800 family simplifies TV audio design while offering high-end value added features while lowering system costs."
Here is some good background info. on the Patents, courtesy of a Yahooligan:
"Here it is, for skeptics (including Perpetuatethemyth, who attempted to claim that the MPMan deal was merely smoke and mirrors to pretend the patents weren't valid), the ruling in which the patents now owned by SGTL were declared valid by the Korean courts.
In the court case, MPMan was having its patents attacked by a group of 16 Korean manufacturers who didn't want to have to pay MP Man royalties. After MP Man won the case and the patents were affirmed, Reigncom (maker of Iriver) bought MP Man to avoid having to pay the royalties. Then Reigncom sold the patents to SGTL and yesterday agreed to move all of its MP Man labeled players to SGTL chips. Expect them to move Irivers to sgtl shortly, too.
Anyway, here is the 2004 story when the patents were declared valid in Korea, home to a huge percentage of the world's MP3 manufacturing capacity:"
204.157.6.79
finance.messages.yahoo.com.
Here is some more good info., courtesy of the same Yahooligan: For 2005, SGTL was number one in SOC market share, selling 50.8 million units.
Actions was second at 49.8. PLAY was a very distant third, with barely over half as many units as SGTL.
The analysis notes that Actions grew extremely fast in 2005, which is obviously what hurt SGTL. But that is the past. Sigmatel has reacted by adding to its already dominant patent position. Already, the older SGTL patents have won an ITC decision to kick Actions out of the US. The new SGTL patents have already convinced Euro companies like Techsplosion and MPMan to convert 100% to SGTL. As 2006 plays out, more and more companies will jump ship from Actions. Actions will fall as quickly as it rose.
Anyway, here's the link, with the numbers:"
digitimes.com
finance.messages.yahoo.com.
Responding To Message #211 from Rutgers at 3/29/2006 12:32:48 PM
SGTL Update - from Monday, March26th - first, new PR and then a third analyst throws in the towel...sure doesn't look good unless you're a contrarian...
First, the PR:
SigmaTel Introduces High Fidelity, Multistandard TV Audio Processors
Monday March 27, 9:00 am ET
SGTV5800 Family Provides A Flexible Design Alternative Supporting All Worldwide TV Audio Broadcast Standards
AUSTIN, Texas--(BUSINESS WIRE)--March 27, 2006--SigmaTel, Inc. (NASDAQ: SGTL - News), a leader in mixed-signal multimedia semiconductors, today announced the SGTV5800 family, the company's first family of high fidelity TV audio processors. Created as a cost effective audio solution for analog, digital and hybrid TVs, the highly integrated SGTV5800 family simplifies TV audio design while offering high-end value added features while lowering system costs.
biz.yahoo.com
Second, the analyst cut:
07:37 SGTL SigmaTel: Checks in Asia validate old concerns and reveal new near-term risks - TWP (10.28 )
Thomas Weisel's checks reveal that SGTL is facing increased market and competitive pressures and that its 1Q is likely tracking towards or below the low-end of the co's guidance of $52-60 mln (down sequentially 27-37%). They say the 2 main reasons for their conclusion are: 1) checks reveal that SGTL continues to face intensifying competition from Asian suppliers at the mid and lower-end of the market, most notably Actions, and 2) disruptions in the MP3 supply chain associated with recent precipitous declines in NAND flash prices (down more than 40% since January in some cases). Their checks indicate that OEMs are likely postponing orders from suppliers as they wait to make more cost-effective purchases. Firm cuts their FY06 & FY07 ests.
finance.messages.yahoo.com.
Responding To Message #209 from Rutgers at 3/23/2006 9:46:38 AM
SGTL Update -
Right on the heels of Jeffries, Wedbush Morgan has cut their 12-month target price from $11 to $9.50.
"In a research note published yesterday, the analysts mention that although SigmaTel has received a favourable preliminary ruling in its case against Actions Semiconductor, this is unlikely to have a significant material impact on the former company's financial prospects. Business trends in the MP3 player market are likely to remain challenging, the analysts say. Moreover, SigmaTel is witnessing product positioning issues, Wedbush Morgan adds. The EPS estimates for 2006 and 2007 have been reduced from $0.25 to $0.00 and from $0.30 to $0.00, respectively."
newratings.com
My Comment: Two analysts have now wiped out any chance of even turning a profit for '06. Sure seems drastic to me, but I've been wrong on this one for a looong time. I am holding for three reasons that still appear to be intact: (1) I have researched this and I cannot find anyone with a SOC that can match or exceed the SGTL SOC; (2) I believe that the tail end of '06 should be a huge ramp up in sales based upon the wave of "replacement" MP3 players with Bluetooth or wireless capabilities; (3) patent case together with licensing deals should keep some revs coming in; and (4) the printing business while not spectacular should also contribute to the bottom line as we move into the end of '06. Stay tuned b/c I don't know what will happen, but I am certain of receiving more news as we head into summer.
Responding To Message #207 from Rutgers at 3/22/2006 5:50:53 PM
SGTL Trade Status, News and Update -
Interesting week so far for the Charlie Brown of my portfolio. First thing Tuesday morning, ACTS issued the much anticipated PR regarding the Patent Infringement case, which was followed shortly by one from SGTL. After reading the favorable ruling, I purchased more at ~$10.34 b/c I believe that this decision is huge...and I watched it go up as high as $10.87, but came crashing down in the afternoon to close in the red! BTW, to me what was really funny was that an analyst from WRHambrecht actually issued a report last week stating that he anticipated a victory for ACTS. What was that guy thinking? After Techsplosion signed a licensing deal with SGTL, it seemed a foregone conclusion that SGTL would win.
Here's the PR:
Ruling Issued in SigmaTel International Trade Commission Case
Tuesday March 21, 9:34 am ET
SigmaTel Patents Upheld
Judge Recommends Exclusion Order
AUSTIN, Texas--(BUSINESS WIRE)--March 21, 2006--SigmaTel, Inc. (NASDAQ:SGTL - News), a leader in mixed-signal multimedia semiconductors, today announced that an International Trade Commission (ITC) Administrative Law Judge determined that Actions Semiconductor Co., Ltd. infringed two SigmaTel patents and recommended the full ITC issue an exclusion order.
The Honorable Paul J. Luckern, the Administrative Law Judge presiding over the hearing, determined that the two patents asserted by SigmaTel at the final ITC hearing were valid and infringed. The judge also recommended that an exclusion order be issued which prevents the importation of infringing Actions chips and certain MP3 players which contain these chips. During the case, Actions had contended that it did not infringe SigmaTel's patents and that they were invalid.
"SigmaTel is ecstatic about the ITC's ruling in our case against Actions Semiconductor," said Ron Edgerton, chairman and CEO of SigmaTel. "We are proud of our patent portfolio and, with the addition of the original Moon-Hwang MP3 patents, are confident that we will have an even stronger case against IP infringement worldwide."
"With additional SigmaTel patents issuing on a regular basis, we believe it is virtually impossible for our competitors to design around SigmaTel patents and still be successful in the marketplace," Edgerton added. "We intend to protect our customers' investments in SigmaTel-based products and feel obligated to seek the ultimate legal protection achievable based on our US, European and Asian patents which apply to semiconductor competitors, player manufacturer and/or retailers. This ruling gives SigmaTel a significant legal victory and shows that SigmaTel's stated IP goals were achieved."
Specifically, the judge concluded that SigmaTel's 6,633,187 and 6,366,522 patents were valid and infringed. The ruling also included a recommendation that the ITC issue an order barring any MP3 players based on infringing Actions chips which contain two gigabytes or less of flash memory from being imported into the United States. The judge's determination and recommendation will now be reviewed by the full ITC. At this time, the ITC has only released a summary portion of the judge's determination. A public version of the full determination will be made available on SigmaTel's web site (http://www.sigmatel.com) as soon as it is released by the ITC.
SigmaTel's continued success is based in large part on protecting its intellectual property and innovating new technologies. SigmaTel protects its innovations by filing numerous patent applications and has added intellectual property via recent acquisitions, complementing its internally developed intellectual property holdings. SigmaTel has 55 issued patents and another 148 pending applications in the US Patent office. The company also has 17 patents in the European Union and 11 patents in the Asia Pacific region. Please visit sigmatel.com, for specific patent information.
Then, after that great news from yesterday came today's blindsided hit - for whatever reason, and I suspect that Jeffries wanted to squelch any upside momentum that SGTL otherwise would have had, Jeffries cut its target to $9.50 saying 1stQ was not tracking well. The latter was a read head scratcher inasmuch as SGTL already warned about Q1 and Q2. So, the stock gets a downgrade and what happens, well, the stock went down initially, but then rallied up into the close of the day. I am thinking that SGTL may have been pissed enuf to have bought back shares today. Anyway, here's the second snippet:
Here's the Jeffries blurb:
08:27 SGTL SigmaTel tgt cut to $9.50 from $11 at Jefferies (10.28 )Jefferies cuts their tgt on SGTL to $9.50 from $11 saying that based upon checks within the MP3 supply chain, they believe that the co is experiencing weakness in Q1 as MP3 production is being held back due to declining NAND pricing.
and a Yahooligan posted this follow-up: "Wow - they took 2006 estimates to 236mm rev and -.33eps vs street view of 293mm and +.23. Normally, analysts warrant little attention, but they have a pretty good ecord on this one"
Responding To Message #197 from Rutgers at 3/7/2006 9:37:22 AM
SGTL news and a comment -
SigmaTel and Infineon Bring Enhanced Connectivity to Portable Media Players
Tuesday March 7, 9:00 am ET
Companies Will Jointly Develop Bluetooth Solutions Optimized for Digital Multimedia Devices
AUSTIN, Texas & MUNICH, Germany--(BUSINESS WIRE)--March 7, 2006--SigmaTel, Inc. (NASDAQ:SGTL - News), a leader in mixed-signal multimedia semiconductors, and Infineon Technologies AG (FSE/NYSE: IFX), a leading communication semiconductor company, today announced that they have entered into an agreement to offer Bluetooth® solutions for portable digital multimedia devices. Under the terms of the agreement, the companies will jointly develop a Bluetooth chip that is optimized for use in digital multimedia devices based on SigmaTel's portable multimedia System on Chip (SoC) solutions. The new chip will make use of SigmaTel's optimized radio architecture and Infineon's expertise in Bluetooth technology, chip design, CMOS process technology, and manufacturing know-how. SigmaTel and Infineon believe this solution will enable widespread adoption of Bluetooth technology in even the most cost sensitive, power and space constrained applications, such as MP3 players or stereo headsets. The new chip will be exclusively marketed by SigmaTel.
...
Prior to the availability of the new optimized Bluetooth solution, SigmaTel will begin offering Infineon's BlueMoon UniCellular (PMB8753) Bluetooth 2.0 solution featuring Enhanced Data Rate (EDR) functionality as part of its STMP3600 MP3 player Reference Design Kits (RDKs). The reference design will provide a turnkey system, including the Bluetooth upper stack software and relevant Bluetooth profiles. The design will also be BQB certified and UnplugFest tested, reducing customer development costs and time to market. SigmaTel's customers can expect a smooth transition from the PMB8753 to the optimized SigmaTel Bluetooth solution.
The addition of Bluetooth to SigmaTel solutions will allow MP3 and portable multimedia device manufacturers to provide seamless interoperability with the rapidly expanding universe of Bluetooth-enabled products, including stereo headsets, headphones, cellular handsets, and car audio systems. New and compelling usage scenarios include:
Wireless streaming of high-quality digital audio from a portable player to a car stereo, including control of the portable player from the car stereo's built-in user interface. No cables, adapters, or custom installations are required.
Sharing of one wireless headset between a portable player and a cell phone, allowing the user to effortlessly switch between phone calls and music playback.
Using wireless headphones for sports or other activities, eliminating the dangling wire, and allowing for convenient control of the portable player directly from the headphone.
SigmaTel's portable multimedia SoC solutions provide high quality audio playback for portable devices such as MP3 players, language learners, and jukeboxes. The company's solutions offer market-leading benefits, including as much as a 30 percent lower bill of materials cost, Hi-Speed USB 2.0, 70 hours of battery life on a single AA battery, and a 14.5 square cm PCB footprint enabling incredibly small form factor products. With flexible software support and upgrade options, the SigmaTel SoC solution offers support for MP3 and WMA audio formats as well as WMA Digital Rights Management (DRM) security.
Availability
SigmaTel's STMP3600 RDK with the Infineon PMB8753 Bluetooth solution is now sampling to SigmaTel's beta customers for production in the second quarter. Customers interested in ordering the RDK should contact their local sales office listed on the SigmaTel web site at www.sigmatel.com or contact sales at sales@sigmatel.com.
Link is here: biz.yahoo.com
SigmaTel Launches Theater Quality, High Definition Audio Codecs Offering Simultaneous VOIP and Audio
Monday March 6, 9:00 am ET
SigmaTel Offers Customers Theater Quality Audio Solutions with New 8- and 10- Channel High Definition Audio Codecs
Link is here: biz.yahoo.com
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My comment: I think the PR dated today is truly significant and demonstrates that mgt is looking down the road. There is no question (at least as of current technology) that the biggest drag on MP3 and video players is the stupid hard-wired headset. Wireless is king. I think it's great that SGTL is sampling this product with customers now.
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