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To: phbolton who wrote (23044)	10/27/1997 10:57:00 AM
From: mike iles	Read Replies (1) \| Respond to of 53903

ph, What's all this trash talk of analysts, eh? These are noble, underpaid people trying to dig out the truth for us investors, no? DavidG's comments sure do rile me up so I went back and examined reports from 2 analysts, Dan Niles at Robbie Stephens and M. Gumport at Lehman Bros. Let's set the scene ... it's Sept.23 ... MU has just reported .33 ... below expectations ... ASP for the quarter was $6.50 ... the current price according to Achilles (but what do they know?) is just a wee bit lower at $5.20 ... the analysts scramble to issue updates ... the stock is $40.50 and they both have BUY recommendations, which they are maintaining (what, me worry?) ... First up is Dan Niles (he gets to go first because he's the most egregiously out to lunch). Despite the drop in pricing, he estimates Q1 eps at .39, up from the Q4 number of .33. Where does this come from??? ... let's go back to a report he put out 8 days earlier when he cut his Q4 estimate to .39. At that time he was talking about seeing demand (maybe he listened to Kipp) having some effects on memory prices and expected that some 'upward pricing movement is inevitable' (whoops) ... for the current year his estimate is $2.60 and he assumes 16 Meg contract pricing of $5.65 for the August quarter ... next year!!!!! M Gumport is much more realistic. After the Q4 numbers come out he cuts his Q1 estimate to .27 from an earlier estimate of .42 and his forecast for the year to a measly $1.50. But he maintains his BUY recommendation. And has this comment in his report: 'Our models assume pricing begins to fall at a more moderate rate within the next few months, and we still assume 16 Mbits are at $3.90 in FY4Q98 (next August's quarter ... one month later we're already there). We are cautious short term, but we do think there is a good chance for an actual uptick in memory prices within the next 9 months.' And he could well be right but from a heck of a lot lower level than he imagined. Sorry for being such a windbag but DavidG don't you think there's something missing? I have no doubt these are bright guys but for some reason they're missing the mark by a country mile. Also if you're relying on Zacks for the latest thinking on earnings estimates you should bear in mind that neither of these analysts has updated their forecasts of a month ago. Given what's happened to pricing since then (Jerry D ... thanks for the update), this stuff is ancient history and so is Zacks. regards, Mike