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Technology Stocks : Creative Labs (CREAF) -- Ignore unavailable to you. Want to Upgrade?

To: Stephen Nelson who wrote (11989)	8/8/1998 8:13:00 PM
From: Brian Lempel	Read Replies (1) \| Respond to of 13925

Steve, CREAF is predicting sequential growth of 10%. Audio revenue is expected to come in at 40% of total vs. 34% this quarter (without SBLIVE). the 10% increase, per my calculations, assumes NO growth in all other business segments. With continued DVD, Speaker, and continuing Voodoo II and a few TNT shipments, I see upside to their 10% estimate. Brian

To: Stephen Nelson who wrote (11989)	8/10/1998 10:04:00 AM
From: Flint	Respond to of 13925

No hints on projected revenues. But for Creative, FY98 saw some one-off hits. Exclude that and u should see 30% EPS growth YoY SB Live has to suceed for Creative or FY99 will really really suck. It's not just the cards but the speakers as well. both are high ticket high margin products for Creative. If they succeed, then Creative will easily achieve 25% Rev growth YoY and 35-38% Gross Margin. If they are mediocre, then 5-10% is still possible and some 30% GM (assuming Creative cuts prices to force stocks to move) Regardless, FY99 is a recovery year. The wildcard remains demand in their Asian operations (i.e. that it falls off but not completely) and Europe (where it should hopefully pick up with economic bullishness there) Risk reward suggests going long pretty soon.