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

To: uu who wrote (11638)	4/15/1998 1:05:00 AM
From: john dodson	Respond to of 25814

Dunno if anyone follows "Louis Rukeyser's" newsletter, but the April, 1998 issue had a fairly lengthy, somewhat mixed, mention of LSI. It's interesting that LSI is in the lower third of its trading range for the last 3 years, and they're implying a sell of LSI for a loss would not be unreasonable. What a bunch of wacko's. Barring a Playstation loss for LSI or a big earnings shortfall, there's only upside left for the next several quarters in my view. Here's the quote: Q: "I am a 75-year-old retired investor who owns LSI and SGI within my IRA, and I have big paper losses in both stocks. Would you recommend sale at current levels?" A: "It depends on what else you own and how much money you have. Both companies have solid long term potential but face competitive environments that call their future stability into question. If you own the stocks within a broadly diversified portfolio, and you aren't reliant on them to fund your current standard of living, we think you should consider holding on. Otherwise we recommend selling. The stock Prices of LSI and SGI have each fallen 30% over the past year. LSI has been hurt by increasing capacity in the semiconductor industry, which has led chip prices lower. But the company has one significant Strength: it's the leader in the development and production of custom semiconductors produced for specific customers, including video game manufacturers, that need technological differentiation to attract buyers. While earnings growth for all of 1998 is unlikely to be robust, new multimedia chips for home-theater and personal-computer products, as well as new chips for digital cameras and wireless-communication equipment, are expected to add $100 million (or 7%) to LSI's 1998 revenues and add a few cents to earnings. And LSI estimates that satellite set-top box revenues (less than 8% of total revenue in 1997) will grow by 30% in 1998. A key risk: about 20% of LSI's current sales are to Sony, mainly for its PlayStation product." Good Trading Fellow LSI'ers, -John Dodson

To: uu who wrote (11638)	4/15/1998 10:58:00 AM
From: Moonray	Respond to of 25814

Silicon Graphics to use Intel processors SANTA CLARA, Calif. (AP) -- Silicon Graphics Inc. said today it will use Intel Corp.'s chips in its computers and spin off part of its own chip subsidiary as part of a broad recovery strategy. The agreement with Intel will allow SGI to offer its own high- end graphics technology on machines using Intel chips. The computers will run on both SGI's Unix-based operating system and Microsoft Corp.'s popular Windows NT software. Silicon Graphics, based in Mountain View, Calif., had been expected to adopt Intel processors, which have become standard in the industry with a huge variety of software applications. But Rick Belluzzo, SGI's new chairman and chief executive, said his company wasn't simply becoming part of the ''Wintel'' platform, the industry name for the dominant combination of Windows software and Intel chips. ''It's really quite the contrary. We are taking the Intel architecture and building around that,'' he said in an interview. Belluzzo also stressed that the alliance with Intel and the decision to shed much of its MIPS Technologies chip subsidiary were part of a wide-ranging plan to revive Silicon Graphics and clarify its direction. ''What we're really doing today is (outlining) the direction of Silicon Graphics, talking about the path forward,'' he said in an interview before announcing the changes at a briefing with analysts in New York. The announcement was the first important news out of SGI since Belluzzo took charge of the company earlier this year, succeeding Ed McCracken. He previously was the No. 2 executive at Hewlett-Packard Co., where he oversaw that company's successful computer business. Belluzzo is respected in the industry for his no-nonsense management style. Industry analysts said he was capable of leading Silicon Graphics out of its difficulties. SGI is best known for its workstations, which are powerful desktop computers used by scientists, engineers and artists. Only a few years ago it was flying high, famous for its technology used to create special effects in such movies as ''Jurassic Park.'' But since then, the company has been grounded, hurt by competition by Hewlett-Packard and Sun Microsystems and by Intel-based workstations and other computers using Windows NT. In January, SGI reported its most recent loss, $31 million, or 17 cents a share, for the October-December quarter. The results reflected charges of $53 million, largely to pay for a restructuring that included hundreds of layoffs. SGI plans to ship workstations with Intel chips in the second half of the year. The agreement with Intel also allows the company to use Intel's next-generation processor, known as Merced, in servers and high-end workstations. Belluzzo's announcement also included spinning off its MIPS chip subsidiary as part of SGI's plant to concentrate on its core business. SGI will retain MIPS' microprocessor technology but will shed the rest of its assets as a public company focusing on the consumer electronics. MIPS chips are currently used in video game machines, set-top boxes and other devices. SGI, by making an alliance with a major industry player and adopting standards, is following a path that analysts previously recommended to Apple Computer Inc., said Rob Enderle, an analyst with Giga Information Group in Santa Clara, Calif. Such a move frees a company from having to compete against mainstream basic technology and allows it to use its resources to distinguish itself from other computer makers -- in this case HP, Compaq and IBM. ''This would be a good case in point to see if this course will work,'' Enderle said. o~~~ O