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Technology Stocks : Seagate Technology -- Ignore unavailable to you. Want to Upgrade?

To: Greg Cervelli who wrote (4215)	11/20/1997 8:37:00 PM
From: jelrod3	Read Replies (5) \| Respond to of 7841

Regarding EPS estimates for SEG....from Dow Jones the following appeared in an article published yesterday: "PaineWebber Inc. analyst Paul Weinstein said Seagate is working to streamline its manufacturing process and to adapt the way it launches products. The success of these efforts, Weinstein said, depends on how well Seagate carries out its plans. But he said he doesn't expect Seagate to begin to show any concrete results of the overhaul until after the March quarter. "I would suspect it to be the second half of '98 before the financials start to turn around," Weinstein said. "It's not a very pretty picture." During a complicated first quarter, Seagate gave two warnings, only to come up short of the reduced Wall Street forecasts, said First Call Inc. research director Chuck Hill. Hill said five analysts have reduced their second-quarter outlooks for Seagate so far. The consensus estimate has fallen to 4 cents a share, down from 24 cents a share, according to the preliminary numbers for the second quarter, which ends Jan. 2, 1998. For fiscal 1998, the consensus estimate has fallen to 49 cents a share from $1.24 a share, Hill said, citing the preliminary numbers." Earnings of only $.49 per share in fiscal 1998 can only be described as grim. This would imply a massive drop in the price of this stock if it trades at historical average normalized PE of 15x earnings. This translates to the stock cratering to $7.50 per share if history is any guide. But the money men holding this stock are smarter than we are, and certainly with this forecast they would have bailed out by now. Greg, your report is appreciated. Regards