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 : S3 (A LONGER TERM PERSPECTIVE) -- Ignore unavailable to you. Want to Upgrade?

To: Phil Fischer who wrote (7156)	11/3/1997 6:19:00 PM
From: Leman	Read Replies (1) \| Respond to of 14577

even with this decrease the PE is not that bad whats your thoughts

To: Phil Fischer who wrote (7156)	11/3/1997 6:31:00 PM
From: Ken Muller	Read Replies (3) \| Respond to of 14577

Phil: I guess this kind of thing happens when you don't have a CFO in charge. He must have had a hernia when he was pouring over the numbers! Writeoff versus Revenue Shift Let's look at the results, however. Unless something else is going on (double-counting), the sales thru the distribution channels will be credited during this 4th quarter and maybe a little during the 1st quarter. (Its highly unlikely the distys in the Far East keep more than 13 weeks of inventory.) The prices at which the material was sold to the distys will not change. So, revenues for the year shouldn't change too much (other than some which will end up in first quarter.) Not a big confidence builder! Wonder if anyone knew about this ahead of the announcement... Ken

To: Phil Fischer who wrote (7156)	11/3/1997 6:40:00 PM
From: Synapsid	Read Replies (2) \| Respond to of 14577

It is a very curious announcement. It sounds like a sudden accounting method change (conforming to official policy which was not adhered to before), not in principle a shortfall in sales. Of course, due to this change revenues for the past period are stated lower. I think it means that as of September 31, 1997, S3 had $40M to $70M of unsold chip inventory at distributors. Hmm, how does pricing pressure come into play, unsold chips at distributors recorded at (much) higher value than actual current selling price? That would indicate an honest shortfall in sales. This decision does patch up Q4 results dramatically, doesn't it? (at the cost of previous quarters) Similar tricks are done all the time. Even CRUS had some going with the charge for "underused capacity" up to September, but charged in March.