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Technology Stocks : Adaptec (ADPT) -- Ignore unavailable to you. Want to Upgrade?

To: w2j2 who wrote (813)	1/9/1998 2:07:00 PM
From: Charlie Smith	Read Replies (1) \| Respond to of 5944

Walter: According to Saviers' comments on the conference call, ADPT missed their quarter due to a $25 to $30 million revenue shortfall. This shortfall happened for two reasons. First, SCSI sell thru in the distribution channel was weaker than expected. Historically the last 60 days of each year ADPT sees strong sell thru of host adapters in the distribution channel. This did not occur this year. VARs and integrators did not buy as much as "normal". The company had no good explanation for this, but surmised that the move to lower price point PCs is hurting the demand for SCSI adapters. Analysts on the call didn't buy this hypothesis, due to the fact that desktop PCs selling for $1500 to $2000 generally don't have SCSI to begin with, so lower price points should not have had any effect. There was much confusion on this point, and the call ended without much clarification. The second reason given for the shortfall was weak host adapter demand from Japan. The company expects disk drive asic sales to be down sequentially in the March quarter, and earnings to be about the same as the December quarter (.35 to .40 range). Street estimates are now in the $1.75-$1.80 range for 98 and $2.20 for 99. Hope this helps.