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Technology Stocks : The New QLogic (ANCR) -- Ignore unavailable to you. Want to Upgrade?

To: Tom Duxbury who wrote (18842)	10/27/1998 9:13:00 PM
From: Kerry Lee	Respond to of 29386

<<DO NOT overreact to the numbers and listen very closely for hints of the BIG things coming in the very near future.>> Based on the bad news ( Hucom/Japan, OEM's pushed out, product write-offs due to LAN de-emphasis ) from the Q2 conference call in July, I don't know why any rational person would have expected a blow-out quarter aside from the Inrange deal. The Inrange deal revenue recognition has been the biggest unknown since the $9 million contract was announced. If your info is correct, then it sounds like Ancor's new auditors won the battle over taking the most conservative revenue recogniton policy. Sounds like a last minute reversal in decision by their auditors..If that's true, it obviously doesn't help Q3 numbers, but it might smooth out revenues for the upcoming quarters and make the sequential growth numbers look better down the road. For instance, last year at this time, we had a record $3.7 million revenue announced for Q3, 1997 ( due to large Hucom order), but that good news was offset by a corresponding warning in the press release that Q4 1997 would be worse than Q3. The Market/stock price completely ignored the Q3 results based on the forward-looking statements and the stock fell from 8 to 6..Perhaps we'll see the opposite situation this time?? The question is how many months/quarters it takes for Ancor to recognize the $7 million licensing fee. I still think the $2 million pre-paid royalties is a second half 1999 event.As far as the Boeing revenue ( $1.9 million ) and Hucom/Netmarks revenue ( $500,000 - $1 million ) being reflected in Q4, that is entirely consistent with my previous assumptions which were posted here on SI. The implication is that Q4 1998 could be a record quarter for Ancor from both a revenue and profit perspective, assuming your info is correct about Inrange revenue not being reflected in Q3 to any great extent.