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To: TREND1 who wrote (30769)	3/19/1998 11:03:00 AM
From: Mike M2	Respond to of 53903

Larry, I don't look at brokerage reports they are too optimistic. You might want to go back six months to see what these optimistic brokers had anticipated for the most recent Q . Mike

To: TREND1 who wrote (30769)	3/19/1998 11:14:00 AM
From: ComSolut	Read Replies (1) \| Respond to of 53903

Larry, Reference earnings estimates next quarter MUEI first. Based on the last quarter several notes are worth highlighting: 1) On an operating basis MUEI lost money, 1 time gain less restructure charge (write down of inventory less operating loss of approx. 7.5 cents 2) Management states they see an industry wide price decline in computers. Sales declined 3%. Unit sales up 7%. Average selling price fell 14-19%. Market highly competitive. Gross margins down. Not a pretty picture and the trend looks bad to me. So how do they fix the problem. 4 ways 1) Improve profitability & cash flow (can only lose money for so long) by reducing operating expenses - particularly reducing PC work force by 20%! and consolidate facilities 2) Change Sales force compensation to be margin based. Neither of the above can be good for morale. 3) Enhance and target DIRECT MODEL focusing on core and product superiority. 4) New Marketing Engine - Fired old marketing company and hire new marketing and advertising company and start a new ad campaign. More advertising expense even though management states ad expense are too high and keep going higher. My own two cents says MUEI is having trouble competing. The product may be great but the price is too high, market too competitive, management cannot get a handle on costs. Need to make more sales - people need to know about the product so more advertising. BUT AD COSTS COME FIRST & SALES SECOND - if sales do not go up then even higher operating costs. MU 1) Operating loss of -26 cents (-15 cents was MUEI and R&D) 2) DRAM prices continue to drop, supply exceeds demand. Okay, how to be competitive. My opinions - research and get there first to capitalize on higher margins early in the product cycle - but MU does not utilize this strategy. Be a low cost producer (MU Strategy) but if sales price is less than production costs how can money be made. OH BUT - 64 meg and other new products with still high selling prices. Well, if recent history is to judge, the prices will fall rapidly as supply increases and there goes the profits that were prevalent 2 years ago. ESSENTIALLY - MUEI is trying to be a quality pc supplier in a price market and MU is selling DRAM in an industry experiencing over supply. UNLESS the SUPPLY equation changes or MUEI can penetrate the PC market against DELL and company with a new business approach I am not hopeful of any positive change in the earnings picture. Sorry for the long post but would enjoy a discussion of the above company and personal observations. ComSolut

To: TREND1 who wrote (30769)	3/19/1998 11:36:00 AM
From: Patrick Koehler	Read Replies (1) \| Respond to of 53903

Larry, In regards to your following statement: It seems to me that MU's earnings have to get worst every quarter or the bottom is in ! Dec 15, 1997 MU=22 EPS=0.04 Feb 16, 1998 MU=33 EPS =-0.41 May 1998 MU= ??? if EPS not so bad as -41 cents I assume that you meant Mar 16, 98 and June. My opinion is that you can pencil in the date as Monday, Jun 15th. Patrick

To: TREND1 who wrote (30769)	3/19/1998 11:42:00 AM
From: Russ	Read Replies (1) \| Respond to of 53903

Dec 15, 1997 MU=22 EPS=0.04 Feb 16, 1998 MU=33 EPS =-0.41 May 1998 MU= ??? if EPS not so bad as -41 cents The progression is very easy to see. In June, the stock will be trading at 44, as long as they manage to lose at least $4.00/share. -Russ

To: TREND1 who wrote (30769)	3/19/1998 8:33:00 PM
From: Zeev Hed	Respond to of 53903

Larry, your $-41 should really be -$.98 per share, and since I do not think they have much else less to sell (but who knows, they may find a sucker for Lehi and turn this mini disaster to a victory), , in order to be a worst quarter, MU will need to do worse than this quarter. I am not sure if that is very likely. Their rate of cost reduction continues, their increase in 64 chips wafer starts continues as well. The other side of the equation is how fast will DRAM decline from here. If the recent mini acceleration was indeed due to Korea (and I should add MU) rushing to market with excess inventories, these might be a tad depleted, and maybe just maybe, the rate of price decline will not be as fast as cost reduction. Than you might indeed have have a lower operating loss than this buck per share this quarter. I won't even guess what the price will do.As you have mentioned, the SOX seems to be making a tepid effort at reversing, but I think it is just a DCB. If the sox doe break back under 290, I think the down trend will continue and with it we may have MU in the higher 20's this time next month. Around 28 or so, there could be a lot of short covering. Zeev