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Technology Stocks : Micron Only Forum -- Ignore unavailable to you. Want to Upgrade?

To: Mike M2 who wrote (26582)	1/15/1998 1:19:00 PM
From: DavidG	Read Replies (1) \| Respond to of 53903

Mike, << I won't waste a lot of time debating details about costs but consider the fact that Micron only made $10 million dollars with asp of $4.50. This tells me that Micron's costs are closer to Earlie's estimates than yours. >> I am no F/A expert and I am the first to admit it, but I think you are mixing apples and oranges...Also I believe they indicated their asp was closer to 4.90. Remember, MUEI is also included in those cost numbers. If I find the past commentary, I will repost it regarding MU gross costs for 16mb chips. They actually indicated that MU got the per chip cost down to $3. When I calculated the estimated eps for 1Q98 I used $3.50 and it came out close(but I calculated out an asp from Smiths Site at $5.12). With the asp actually a little lower it meant the cost was probably a little lower to obtain the same eps. The only problem I ran into was the SG&A which was $28mil higher than last quarter reducing the eps by $.13...and this was primarily due to MUEI TV advertising...Otherwise MU would have earned $.17 instead of $.04. MUEI has a significant impact on MUs bottom line that I do not believe people are taking into account. Some food for thought, Samsung bought ASTA last year, maybe you can find out how they separated out the pc vs semi costs. Good Luck DavidG PS: I'll bet samsung now regrets buying ASTA.<g>

To: Mike M2 who wrote (26582)	1/16/1998 1:12:00 AM
From: Skeeter Bug	Read Replies (1) \| Respond to of 53903

mike, you and earlie are rightre right and david is wrong. i went through the math in a post just prior to this one. mu's net cost is around $0.09 below their asp. that makes $4.81 their net cost if their asp was $4.90. i'd assume 10% a q cost reductions per chip per q for mu. i think it is generous, but then i've always been generous with mu by overestimating eps and the like. my concern is that it will take some sort of "EVENT!" to knock the complacency investors have regarding mu. you think this q will be horrible? it is expected to be horrible and it still trades near the mid $30s. nobody cares. i expect muei to contribute to eps this q - maybe a nickel or a dime. mu's semi business is in the hole, though. they will have an extra $30 million in depreciation and amortization per q going forward. that is nearly $0.15 per share to cover. in addition, they'll need to write down inventory. as they spend their $500 mil they will need to pay 7% interest on it. in addition, they'll have to pay the $500 mil back. where oh where does the money come from? anyway, nobody cares now. maybe when mu posts a loss this q then people will care, but you never know. good luck.