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Technology Stocks : Adaptec (ADPT) -- Ignore unavailable to you. Want to Upgrade?

To: The Philosopher who wrote (3925)	10/22/1998 9:46:00 PM
From: Starowl	Read Replies (1) \| Respond to of 5944

Christopher: Hello! I listened to the conference call, looked over the numbers, thought a bit and came to the conclusion that we have seen the worst. That doesn't mean "voodoo" won't make any money next week, but barring the unforeseen international crisis Adaptec is on the rebound, in my view. Expenses are coming down, revenues will be rising and earnings, too, and backlogs have significantly diminished. Outstanding shares have dropped from 113 million to about 108 million at the end of Q2 with approval to buy $200M more at market. Management seems non-plussed about near-term prospects for Fibre Channel but have not walked away from FC. Boucher said he does not expect to see FC ramp as much as prognosticators have predicted and hinted at alternative solutions down the road. UDMA has pretty much run its course in terms of its impact on Adaptec's desktop market, so UDMA-66 won't have much effect. The divestitures will take about another 30 days to complete. Even then, Adaptec apparently will have close associations with its new partners. Boucher or Stevens said Adaptec is in an "extremely" competitive position and significantly ahead of LSI and QLogic in next-generation products. On the software side, management expects to see a significant surge during this quarter, with VideOh! sales having an effect in the 3rd quarter. On a question of when SCSI will peak, the answer addressed the arrival of Ultra3 SCSI (160M) in mid-CY99 to be followed by the next generation SCSI (320M), so it is difficult to project an environment where SCSI and FC crossover. Worldwide headcount has dropped to 2400. Adaptec is very positive on RAID, continuing to note the arrival of a powerful new product. Very cagey on discussing any new products, as one would expect. No sign of the defensiveness during previous conference calls this year. I think we're going to hang around the mid-teens for awhile, unless the company has any surprises up its sleeve. Starowl