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Technology Stocks : S3 (A LONGER TERM PERSPECTIVE) -- Ignore unavailable to you. Want to Upgrade?

To: Michael who wrote (11491)	7/14/1998 2:38:00 PM
From: Don Earl	Read Replies (1) \| Respond to of 14577

Hi Michael, Using forward looking statements by the company of a projected flat quarter and average expenses, I came up with -.36. With rumors floating around about over supply problems and pricing pressure, I really don't see how they can come in much better than that. The only kicker is that last Qs numbers looked to me like they wrote off everything they could possibly think of to offset the sale of the USC stock. They may have given themselves some cushion to ride out what they knew was going to be a bad quarter. IMO this will be the worst quarter S3 will see for the next 2 years. Expenses have been cut way back and a return to sales levels of the past year or so should show some nice profits. I expect a return to profitability in Q3 and a blow out 4th quarter. From last Qs conference call they have the next generation of the Savage chip on the drawing board and should have a giant killer out around the end of the year. Personally, I think .17 for FY99 is absurd. I wouldn't be surprised to see them start pumping out .30 to .50 quarters in 1999. I honestly believe there is going to be a buying frenzy going into Y2K that will blow the doors off even the wildest expectations in the computer industry. IMO S3 is beautifully positioned to cash in big next year. Semis could be hotter than internet stocks by next summer. We'll see. Regards, Don