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Technology Stocks : Maxtor (MXTR) -- Ignore unavailable to you. Want to Upgrade?

To: John Carson who wrote (237)	4/24/1999 1:16:00 PM
From: SteveG	Respond to of 467

4/23 MXTR comments from ML [Merrill HAD been a recent bull, and SSB lowered their price target from an ambitious $24 to a hopeful $15. BBRS analyst Dan Niles hates the HDs and thinks they are commodities. Of course, he called (privately) for IBM to miss their Q. Fwiw, I took my losses at open - 6 1/4. Sayonara] Investment Highlights: · Maxtor met the consensus in what is seasonally the toughest quarter. However, visibility has been reduced due to increased competition and pricing pressures. We like the company's ability to grow share, but have become more negative on the industry. · We lowered our 1999 EPS estimate from $0.96 to $0.50 and our 2000 estimate from $1.40 to $0.80. We are lowering our intermediate term rating to a Neutral from a Buy. Fundamental Highlights: · Maxtor reported EPS of $0.17 on revenue of $682 million, up 24% from last year. Unit shipments rose 4.5% sequentially to 5.55 million units, but ASPs fell 10% from 4Q. · EPS matched consensus, but pricing deteriorated significantly in late March. All competitors are shipping 4.3GB/disk drives. · Maxtor increased its penetration in the distribution channel as it had indicated. Channel inventories were a modest 2-3 weeks. · Maxtor is quickly ramping production and yields on its 7,200 rpm GMR 5120 drive. Shipments should be meaningful in 2H/99.