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 : LSI Corporation -- Ignore unavailable to you. Want to Upgrade?

To: Duane L. Olson who wrote (7733)	11/10/1997 2:02:00 AM
From: shane forbes	Respond to of 25814

OSO those numbers of thine they can lie!!! From there, let's say we start getting (min) 25% growth How? First we would need 385 million in revenue for Q1'98 - considering that LSI is forecasting flat revenue of 325 or so for Q4'97, this would suggest an 18% sequential growth rate in revenue which LSI has never duplicated in its past (at least counting from 1993 - post restructuring). LSI does not ramp up as quickly as one might hope. Incidentally Q4 of any given year is usually the strongest quarter of the year and the following Q1 of the next year usually shows reduced to flat revenue. (1995 also was the strongest year in the semiconductor industry ever so looking at data involving 1995 will necessarily skew things.) if we were to run the higher end of the growth game -- say 45% I see dlo getting just a tad wildly optimistic here! The highest single year growth rate Year-over-Year for the industry was around 40+% for 1995 over 1994. (think there may have been another 40+% year in the 80's - before that does not count since industry was relatively immature and I do not recall #s!) Usually these kinds of years are followed by mid single-digits for the following year(s) because of over-capacity etc. No way is LSI going to do 45% sequential growth for 3 years!!! (sorry) A company with 100 million in revenue might do this kind of 45% growth for a few years in a booming industry but a company with 1,300 million just won't be able to internally grow that fast unless they are "special" like MSFT and CSCO. --- Posted in a previous note but half of LSI's business is plain old fashioned gate arrays. That is 650 million in revenue is growth arrays. This business is going nowhere. All the stuff about DVD etc more than likely revolves around standard cells. The industry averagee for this segment is 9% CAGR for the next five years. And this is going to go lower more than likely. So if half the business is growing at 9% (max.) very very hard for me to see 45%. Even something as "low" as 25% looks hard to believe - say LSI grows both segments - gate arrays and std. cells - at the average CAGRs of 9% and 30% respectively - the blended rate is around 20%. Incidentally this is the number First Call has for expected growth rate over the next 5 years. (Of coure First Call has EPS growth of 20% which suggests to me anticipated revenue growth of less than 20% is expected from LSI - but I'll give LSI a bit of slack!) Agree with fact that you imply that you do not need 3 billion in revenue to generate EPS of 2.10 (conservative though as he said). I think the guy had too much to smoke before giving Barrons the interview or else his financial analysts should be fired or else he is talking up the stock because he wants to dump or he is in the early "LSI is the greatest company since sliced bread" stage (weren't we all when we first checked out LSI - I certainly was!).