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Hey Hawk,
I think a lot is going to depend on MSFT's CC, the BTB & guidance from QLGC & other biggies....... if positive, I see no reason why tomorrow isn't at least a positive day....... with some volatility from options expiration.
Hope all is well with you.
Tim Ö¿Ö
16:56 ET McDATA beats by 5 cents, issues guidance above consensus (MCDT) 8.30 -1.32: Reports Q2 pro forma loss of $0.02, $0.05 better than the Multex consensus; revs were $77.3 mln, vs consensus of $63.6 mln. Co expects Q3 loss of $0.02-$0.01 and revs of $83-$84 mln (consensus is a loss of $0.05 and $68.9 mln), and Q4 EPS of (0.01)-$0.01 and revs of $90-$92 mln (consensus is a loss of $0.02 and $79.3 mln).
16:44 ET Guidant beats by 4 cents, issues 2002 guidance above consensus (GDT) 28.82 -0.18: -- Update -- Reports Q2 pro forma EPS of $0.53, $0.04 better than the Multex consensus; revs were $807.0 mln, vs consensus of $734.9 mln. Co expects 2002 EPS of $2.00-$2.06, vs consensus of $1.99.
16:40 ET Vertex Pharm matches estimates (VRTX) 15.70 -0.77: Reports Q2 (Jun) loss of $0.28 per share, in line with the Multex consensus of ($0.28); revenues rose 4.2% year/year to $42.3 mln vs the $45.3 mln consensus; sees full yr revs of $180-$195 mln vs the current consensus of $187 mln.
16:38 ET eBay reports Q2 results (EBAY) 60.45 -1.17: Reports Q2 earnings of $0.19 per share vs no comparable consensus because the company recently pre-announced; net revenues totaled $266.3 million; expects that net revenues for Q3-02 "could range between $278 and $281 million, Q3-02 pro forma earnings per diluted share will approximate $0.19."
16:37 ET Gateway misses by 2 cents, issues guidance (GTW) 3.66 unch: -- Update -- Reports Q2 loss of $0.19, $0.02 worse than the Multex consensus; revs were $1.0 bln, vs consensus of $991.8 mln. Co expects Q3 rev to increase sequentially and net loss to improve modestly from Q2 (consensus is a loss of $0.10 and $1.15 bln), and reaffirms 2002 guidance for rev of $4.5-$5.0 bln (consensus $4.45 bln).
16:33 ET Microsoft beats by a penny (MSFT) 51.11 -0.89: Reports Q4 earnings of $0.43 per share, $0.01 better than the Multex consensus; reports Q4 revenue of $7.25 billion vs the consensus of $7.08 billion; sees Q1 earnings of $0.42-$0.43 per share vs the consensus of $0.42 per share.
16:33 ET QLogic beats on top and bottom lines (QLGC) 41.33 -1.47: Posts Q1 pro forma net of $0.26 a share, $0.03 better than the Multex consensus. Revs rose 9% sequentially to $100.8 mln (consensus $96.74 mln).
16:28 ET Nortel matches estimates (NT) 1.31 -0.04: Reports Q2 (Jun) loss of $0.09 per share, in line with the Multex consensus of ($0.09); revenues from continuing operations were $2.77 billion vs the consensus estimate of $2.81 billion; expects Q3 2002 revenues to be essentially flat to Q2 vs the current consensus estimate of $2.92 bln.
16:28 ET PeopleSoft beats by a penny (PSFT) 14.51 -1.12: -- Update -- Reports Q2 pro forma EPS of $0.14, $0.01 better than the Multex consensus; revs were $482.2 mln, vs consensus of $471.2 mln.
16:26 ET Vitesse Semi matches on EPS; reduces workforce (VTSS) 3.18 -0.17: Posts a Q3 net loss of $0.10 a share, in line with the Multex consensus. Revs increased 2% sequentially to $43 mln (consensus $44.61 mln). VTSS will reduce its workforce by 200 employees.
16:26 ET Xilinx reports in-line earnings, Q2 rev guidance below consensus (XLNX) 19.52 -1.08: -- Update -- Reports Q1 GAAP EPS of $0.12, in line with the Multex consensus; revs were $289.9 mln, vs consensus of $295.0 mln. Co expects Q2 revs of $270-$280 mln, vs consensus of $310.2 mln.
16:25 ET Sybase beats by two cents (SY) 9.71 -0.39: Reports Q2 (Jun) earnings of $0.26 per share, $0.02 better than the Multex consensus of $0.24; revenues fell 12.5% year/year to $205.3 mln vs the $204.2 mln consensus.
16:23 ET BRCM slips 2.6%; XLNX off 4%; ISSX up 3.4%, :
16:21 ET MRO Software reports Q3 results (MROI) 6.99 -0.81: Reports Q3 (Jun) earnings of $0.08 per share, number is pro forma but may not be comparable to the Multex consensus of $0.01; total revenues for the third quarter were $41.4 million vs the consensus estimate of $41.6 million; for fiscal 2002, expects to be at the high end of the pro-forma EPS range of $0.10 to $0.15, and at the low end or slightly below the total revenue range of $171 to $176 million -- current consensus is $0.12 per share and $172.4 mln.
16:21 ET Scientific-Atlanta beats by 3 cents, revs light (SFA) 13.35 +0.21: -- Update -- Reports Q4 pro forma EPS of $0.28, $0.03 better than the Multex consensus; revs were $390.1 mln, vs consensus of $416.3 mln.
16:20 ET Integrated Device matches EPS consensus (IDTI) 14.07 -1.34: Reports
QLogic Corporation Reports First Quarter Results for Fiscal Year 2003, Product Revenues at Record Level
ALISO VIEJO, Calif.--(BUSINESS WIRE)--July 18, 2002--QLogic Corporation (Nasdaq:QLGC - News), the only end-to-end storage network infrastructure provider, announced today its financial results for the first fiscal quarter ended June 30, 2002.
Revenues in the first quarter on a pro forma basis were a record $100.8 million, up 9% sequentially from $92.3 million in the March 2002 quarter. Fibre Channel revenues were up 13% sequentially to a record $68.8 million representing 68% of the overall business, up from 66% in the prior quarter. Gross margins were 63.2% compared to 62.5% in the previous quarter. First quarter pro forma net income increased 20% from the previous quarter to $25.3 million, or $0.26 per share on a diluted basis compared to $21.1 million, or $0.22 per share on a diluted basis.
On a pro forma basis, revenues also increased 9% compared to $92.1 million reported for the same quarter a year ago. Fibre Channel revenues grew 23% from $56.0 million in the June 2001 quarter, which represented 61% of the overall business. Pro forma net income increased 15% from $21.9, or $0.23 per share on a diluted basis in the same quarter last year.
Net revenues on a GAAP basis for the quarter ended June 30, 2002 were $99.0 million, and are net of a $1.8 million sales discount for warrants issued to Sun Microsystems. First quarter revenues on a GAAP basis are up 10% compared to net revenues of $89.9 million reported in the June 2001 quarter. The Company's first quarter net income recorded on a GAAP basis was up 20% to $23.1 million or $0.24 per diluted share, compared to $19.2 million or $0.20 per diluted share in the prior year. The pro forma adjustments include the Sun warrants, merger and related charges, acquisition related stock compensation charges and amortization of goodwill and intangible assets, net of the related tax effects.
The Company's balance sheet was again highlighted by a strong rise in cash and investments, ending the quarter with $547.4 million, an increase of $54.8 million during the quarter.
"We are very encouraged by our first quarter results," said H.K. Desai, the Company's chairman, CEO and president. "Despite continued weak economic conditions and sluggish technology spending, the company experienced strong growth in our Fibre Channel segment and continued moderate growth in our SCSI business. Fibre Channel revenues increased 13% sequentially, while SCSI revenues grew 2% driven by demand from a diverse range of customers. These results represent increasing market acceptance of QLogic product brands, especially SANblade host bus adapters."
QLogic's first quarter 2003 conference call is scheduled today at 2:30 p.m. Pacific Time (5:30 p.m. Eastern Time). H.K. Desai, chairman of the board, chief executive officer and president and Frank Calderoni, vice president and chief financial officer, will conduct the conference call. The call is being webcast live via the Internet at www.qlogic.com or via CCBN. Phone access is available at 913/981-5572, passcode: 102357
A replay of the conference call will be available via webcast at www.qlogic.com or audio at (719) 457-0820, passcode: 102357. The webcast will be available for 90 days. The audio replay will be available through July 31, 2002.
About QLogic (www.qlogic.com)
QLogic Corporation (Nasdaq:QLGC - News) simplifies the process of networking storage for OEMs, resellers and system integrators with the only end-to-end infrastructure in the industry, consisting of award-winning controller chips, host bus adapters, network switches and management software to move data from the storage device through the fabric to the server. QLogic designs and produces solutions based on all storage network technologies including SCSI, iSCSI, InfiniBand and Fibre Channel. A member of the S&P 500 Index, QLogic was recently ranked number 25 on Forbes' Best 200 Small Companies and number 20 on Fortune's 100 Fastest Growing Companies.
Note: All QLogic-issued press releases appear on the company's web site (www.qlogic.com). Any announcement that does not appear on the QLogic web site has not been issued by QLogic.
Note Regarding Pro Forma Financial Information: Certain portions of this press release include pro forma financial information. Such pro forma information is presented in order to enable meaningful period-to-period comparisons and to facilitate better focus on QLogic's core operating results. You should not rely exclusively on the pro forma financial information contained in this press release in evaluating QLogic's financial condition and performance. Instead, such pro forma information should be considered along with our GAAP financial information contained in this release and in our public filings in order for you to have a complete picture of our financial results for the periods in question.
Disclaimer -- Forward Looking Statements
With the exception of historical information, the statements set forth above include forward-looking statements that involve risks and uncertainties. The Company wishes to advise readers that a number of important factors could cause actual results to differ materially from those in the forward-looking statements. Those factors include new and changing technologies and customer acceptance of those technologies; a change in semiconductor foundry capacity or conditions; fluctuations in the growth of I/O markets; fluctuations or cancellations in orders from OEM customers; the Company's ability to compete effectively with other companies; cancellation of OEM products associated with design wins; and reductions in the need for space and increased costs of operations due to facility relocation. Carrying additional expansion space may increase costs and adversely impact future earnings. These and other factors which could cause actual results to differ materially are also discussed in the company's filings with the Securities and Exchange Commission, including its recent filings on Form S-3, Form 10-K, and Form 10-Q.
Note to Editors: Trademarks and registered trademarks are the property of the companies with which they are associated.
QLOGIC CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME -- PRO FORMA
(Unaudited)
(in thousands, except per share data)
Three Months Ended
June 30, July 1,
2002 2001
Net revenues $100,780 $ 92,062
Cost of revenues 37,107 34,311
Gross margin 63,673 57,751
Operating expenses
Engineering and development 16,612 16,026
Selling and marketing 10,618 10,157
General and administrative 3,194 3,783
Total operating expenses 30,424 29,966
Operating income 33,249 27,785
Interest income, net 4,612 5,106
Income before income taxes 37,861 32,891
Income taxes 12,537 10,952
Net income $25,324 $21,939
Net income per share:
Basic $ 0.27 $ 0.24
Diluted $ 0.26 $ 0.23
Number of shares used in per share computations:
Basic 93,177 92,399
Diluted 95,857 94,862
QLOGIC CORPORATION
Reconciliation of Pro Forma Net Income
to GAAP Net Income
(Unaudited)
The following represents a reconciliation of pro forma net income
to GAAP net income. The amounts below are substantially non-cash and
have arisen primarily from the Company's mergers and acquisitions.
Three Months Ended
June 30, July 1,
2002 2001
Pro forma net income $25,324 $21,939
Items excluded from pro forma:
Sales discounts for stock warrants (1,818) (2,161)
Acquired in process R&D charges -- (254)
Merger related stock compensation charges (1,567) (1,117)
Amortization of goodwill and other
intangibles -- (649)
Impact on income before taxes (3,385) (4,181)
Income tax effect of the pro
forma adjustments 1,117 1,422
Impact on net income (2,268) (2,759)
GAAP net income $23,056 $19,180
QLOGIC CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME -- GAAP
(Unaudited)
(in thousands, except per share data)
Three Months Ended
June 30, July 1,
2002 2001
Gross revenues $100,780 $ 92,062
Stock-based sales discounts 1,818 2,161
Net revenues 98,962 89,901
Cost of revenues 37,107 34,311
Gross margin 61,855 55,590
Operating expenses:
Engineering and development 18,179 17,397
Selling and marketing 10,618 10,157
General and administrative 3,194 4,432
Total operating expenses 31,991 31,986
Operating income 29,864 23,604
Interest income, net 4,612 5,106
Income before income taxes 34,476 28,710
Income taxes 11,420 9,530
Net income $ 23,056 $ 19,180
Net income per share:
Basic $ 0.25 $ 0.21
Diluted $ 0.24 $ 0.20
Number of shares used in per share computations:
Basic 93,177 92,399
Diluted 95,857 94,862
QLOGIC CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands)
ASSETS
June 30, 2002 March 31, 2002
Current assets:
Cash and cash equivalents $125,819 $ 76,124
Short-term investments 421,565 416,422
Accounts receivable, net 33,184 38,360
Inventories 29,090 24,758
Deferred income taxes 29,324 27,635
Prepaid expenses and other
current assets 2,743 3,345
Total current assets 641,725 586,644
Property and equipment, net 59,194 60,293
Other assets 18,604 23,078
$719,523 $670,015
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 18,845 $ 15,025
Accrued expenses 47,008 36,007
Total current liabilities 65,853 51,032
Total stockholders' equity 653,670 618,983
$719,523 $670,015
Broadcom Reports Second Quarter 2002 Results
IRVINE, Calif., July 18 /PRNewswire-FirstCall/ -- Broadcom Corporation (Nasdaq: BRCM - News), the leading provider of integrated circuits enabling broadband communications, today reported financial results for the second fiscal quarter ended June 30, 2002.
Net revenue for the second quarter of 2002 was $258.2 million, an increase of 8.1% over the $238.8 million reported for the first quarter of 2002 and an increase of 22.4% from the $210.9 million reported for the second quarter of 2001. Pro forma net loss for the second quarter of 2002 was $16.8 million, or $.06 per share (basic and diluted). This compares with pro forma net loss of $21.9 million, or $.08 per share (basic and diluted), for the first quarter of 2002, and pro forma net loss of $41.1 million, or $.16 per share (basic and diluted), for the second quarter of 2001.
Broadcom reports net loss and basic and diluted loss per share in accordance with generally accepted accounting principles (GAAP) and additionally on a pro forma basis, which excludes the effects of certain acquisition-related expenses, payroll taxes on certain stock option exercises, certain non-recurring charges, such as goodwill impairment, restructuring costs and loss on strategic investments, non-operating gains, and related income tax effects. After including these charges, gains and effects, substantially all of which were non-cash, GAAP net loss for the second quarter of 2002 was $129.4 million, or $.49 per share (basic and diluted), compared with a net loss of $166.1 million, or $.63 per share (basic and diluted), for the first quarter of 2002, and a net loss of $436.4 million, or $1.73 per share (basic and diluted), for the second quarter of 2001. Broadcom uses pro forma reporting internally to evaluate its operating performance and believes this presentation provides its investors with additional insight into its underlying operating results. A reconciliation of the pro forma adjustments to GAAP appears in the financial statements portion of this release.
Both GAAP net loss per share and pro forma net loss per share for the second quarter of 2002 were based on 265.4 million weighted average shares outstanding (basic and diluted), compared to 262.0 million weighted average shares outstanding (basic and diluted) in the first quarter of 2002 and 252.4 million weighted average shares outstanding (basic and diluted) in the second quarter of 2001.
Net revenue for the six months ended June 30, 2002 was $497.0 million, a decrease of 4.7% over the $521.4 million reported in the six months ended June 30, 2001. Pro forma net loss for the six months ended June 30, 2002 was $38.7 million, or $.15 per share (basic and diluted). This compares with pro forma net loss of $23.0 million, or $.09 per share (basic and diluted), for the six months ended June 30, 2001. After including the charges, gains and effects excluded in pro forma reporting, substantially all of which were non-cash, GAAP net loss for the six months ended June 30, 2002 was $295.5 million, or $1.12 per share (basic and diluted), compared with a net loss of $793.2 million, or $3.16 per share (basic and diluted), in the six months ended June 30, 2001. Both GAAP and pro forma net loss per share for the six months ended June 30, 2002 were based on 263.7 million weighted average shares outstanding (basic and diluted), compared to 251.0 million weighted average shares outstanding (basic and diluted) in the six months ended June 30, 2001.
In accordance with GAAP, losses in the 2001 periods include charges for the amortization of goodwill and certain intangible assets. Beginning with the first quarter of 2002, goodwill and intangible assets that are deemed to have indefinite lives are no longer amortized under GAAP but are subject to annual impairment tests under Financial Accounting Standards Board Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets. Had this standard been in effect for the 2001 periods, the net loss for the second quarter of 2001 would have been $229.5 million, or $.91 per share (basic and diluted), and the net loss for the six months ended June 30, 2001 would have been $385.5 million, or $1.54 per share (basic and diluted).
"Broadcom has continued to deliver strong quarterly results, even in this challenging environment. Revenue has shown improvement and pro forma loss per share has decreased for the fourth straight quarter," said Dr. Henry T. Nicholas III, Broadcom's President and CEO. "Our strong performance this quarter was led by our networking and cable modem product lines, as well as initial contributions from our emerging businesses. With the Mobilink Telecom acquisition that closed this quarter, we are aggressively pursuing opportunities in the cellular handset market and are excited about additional wireless opportunities across many of our markets."
Following is a review of selected key accomplishments and progress during the second quarter in the principal markets served by Broadcom:
In addition to closing the acquisition of Mobilink Telecom, Inc., Broadcom made significant advances in its wireless initiatives, specifically in the markets for Wireless LAN and Bluetooth(TM) applications. In the Wireless LAN marketplace, Broadcom secured new design wins with the industry's first direct-conversion, all-CMOS two-chip solution for the IEEE 802.11b wireless networking standard. Earlier this week, Broadcom announced the industry's first dual-band silicon solution for simultaneous IEEE 802.11a and IEEE 802.11b access. In the markets for Bluetooth applications, Broadcom continued to secure new design wins for its products.
During the quarter, Broadcom built upon its leadership position in the enterprise networking market with new Gigabit Ethernet products for both the client and switching markets. Most notably on the client side, Broadcom announced that Compaq is using Broadcom's NetXtreme(TM) Gigabit Ethernet Controllers as the Gigabit upgrade option for Compaq(TM) Evo(TM) workstation and desktop computers. This solution allows Compaq to offer a Gigabit Ethernet connection for the same price as Fast Ethernet. In addition, Broadcom's Altima subsidiary announced its next generation Gigabit Ethernet controllers targeted at small to medium-size businesses.
For the switching market, Broadcom announced the availability of the StrataXGS(TM) chip family, the industry's first complete multi-layer (Layer 2 through Layer 7) scalable Gigabit Ethernet switch architecture optimized for enterprise business networks. This third generation Gigabit Ethernet switch architecture achieves the highest level of system integration in the industry and enables a new class of stackable Gigabit Ethernet switches at significantly lower costs than previously available. In addition, Broadcom and Radlan announced the availability of the Radlan Open and Portable Embedded Networking Software (OpENS(TM)) for the StrataXGS Gigabit Ethernet switch architecture. Broadcom also introduced the ROBOSwitch 2G family of switches that are the first to provide eight ports of Fast Ethernet and two ports of Gigabit Ethernet connectivity on a single-chip for the small to medium-size business market.
In the server solutions market, the company's ServerWorks subsidiary announced two noteworthy product developments. ServerWorks announced its new Grand Champion(TM) SL product which extends the features of its Grand Champion SystemI/O(TM) family to entry-level pedestal, blade and rack-mounted servers. In addition, ServerWorks announced a new South Bridge chip that not only enables smaller, less costly Intel-based server appliances, supporting Microsoft's Server Appliance Kit (SAK) 2.0, but also enhances the entire Grand Champion family by adding greater connectivity to storage and higher PCI bandwidth.
During the second quarter, Broadcom launched three major new products in the digital cable and satellite set-top box markets, continuing to lead the industry in performance and integration. First, Broadcom announced its next generation single-chip cable TV set-top box solution which incorporates many features previously available only in high-end devices. This chip includes personal video recording (PVR) functionality, a high performance MIPS® processor, an advanced graphics engine and significant mixed signal integration for lower system solution cost. In addition, Broadcom introduced a more advanced version of this chip that supports cable modem and dual channel functionality in a single-chip, allowing cable operators to offer an expanded feature set with considerable savings over multi-chip solutions.
Broadcom continued to show progress in its newly addressed satellite set-top market by introducing a single chip decoder that includes PVR functionality, a high performance MIPS processor, an advanced graphics engine, and significant mixed signal integration for lower system solution cost. The chip also integrates multiple new security features to defeat the growing problem of satellite television piracy. In the emerging area of personal video recorders, Broadcom also announced that it was selected by TiVo to provide chips for TiVo's next generation Series2 video recorder.
In the cable modem market, Broadcom announced that advanced cable modem residential gateways using Broadcom chips and software received DOCSIS(TM) certification from CableLabs® in the second quarter. These are the first cable modem gateways to combine a 4-port 10/100 Ethernet router/firewall, 32 Megabit per second (Mbps) HomePNA(TM) 2.0 home phone line networking, and an 802.11b wireless access point into a single, easy to use and manage product, enabling a significant increase in Broadcom silicon content in a cable modem. Broadcom also announced that ADC, Arris, Scientific-Atlanta, Tellabs and Thomson adopted Broadcom's proprietary Propane(TM) high-performance upstream packet acceleration technology, which triples upstream capacity of broadband cable networks.
In the DSL market, Broadcom continued to make significant progress by making available production quantities of its DSL central office solutions which offer the lowest power and lowest bill of materials cost in the industry. In addition, Broadcom continued to expand its DSL product line by introducing the most integrated customer premises router. Broadcom's single-chip ADSL router is the first to integrate the digital transceiver with the analog front end, which enables lower costs and faster time to market for ADSL routers.
In the security market, Broadcom announced its new Multi-Gigabit security processor chip that enables the world's fastest SSL/TLS record processing systems. This chip combined with Broadcom's software, provides manufacturers with a high-performance record layer protocol processing solution for securing confidential e-Commerce transactions and data transfers over the Internet.
During the quarter, Broadcom commenced production of its SiByte(TM) multiprocessor serving the broadband processor market. Broadcom also announced it was sampling the SiByte single-core processor for high volume, cost-sensitive applications.
In the wide area networking market, Broadcom announced several new developments, including a breakthrough chip technology that enables 10-Gigabit per second (Gbps) serial transmission over a variety of copper media, thereby alleviating bottlenecks and reducing the size, power and cost of moving large amounts of data in high-speed switching and routing systems. The new technology also enables a new class of 10-Gigabit serial modules that are both much smaller and application independent.
The company also developed a new platform that enables the interoperability testing of 10-Gigabit Ethernet Xenpak-compliant optical modules and should facilitate more rapid deployment of next generation modules. Additionally, Broadcom introduced the first multi-protocol Dense Wave Division Multiplexing (DWDM) transport processor supporting both 10-Gigabit Ethernet and SONET/SDH applications. This processor reduces costs of transporting different types of traffic across metro networks and consumes significantly less power than prior solutions. Also, Broadcom announced a highly-integrated carrier-class switch fabric chipset with Terabit scalability that enables equipment vendors to build a range of systems that are able to guarantee and dynamically change bandwidth requirements on a per subscriber basis, supporting voice, video and data traffic.
"In summary, we are pleased with a quarter in which our financials continued to show steady improvement, we introduced an impressive range and number of leading edge products, we continued to pick up momentum in design wins, and we began to see market share gains in our emerging markets," Nicholas said. "We believe that our performance this quarter demonstrates Broadcom is solidly positioned to continue to take advantage of current and future opportunities in the broadband marketplace."
Broadcom will conduct a conference call with analysts and investors to discuss its second quarter 2002 financial results and current financial prospects today at 4:45 p.m. Eastern Time (1:45 p.m. Pacific Time). The company will broadcast the conference over the Internet. To listen to the call, please visit the Investor Information section of the Broadcom Website at www.broadcom.com/investor . The Webcast will be recorded and available for replay until 5:00 p.m. Pacific Time, July 25, 2002.
About Broadcom
Broadcom Corporation is the leading provider of highly integrated silicon solutions that enable broadband communications and networking of voice, video and data services. Using proprietary technologies and advanced design methodologies, Broadcom designs, develops and supplies complete system-on-a-chip solutions and related hardware and software applications for every major broadband communications market. Our diverse product portfolio includes solutions for digital and satellite cable set-top boxes; cable and DSL modems and residential gateways; high-speed transmission and switching for local, metropolitan and wide area networking; home and wireless networking; cellular and terrestrial wireless communications; Voice over Internet Protocol (VoIP) gateway and telephony systems; broadband network processors; and SystemI/O(TM) server solutions. These technologies and products support our core mission: Connecting everything(TM).
Broadcom is headquartered in Irvine, Calif., and may be contacted at 1-949-450-8700 or at www.broadcom.com .
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995:
All statements made or incorporated by reference in this release and in the related conference call for analysts and investors, other than statements or characterizations of historical fact, are forward-looking statements. These forward-looking statements are based on our current expectations, estimates and projections about our industry, management's beliefs, and certain assumptions made by us. Forward-looking statements can often be identified by words such as "anticipates," "expects," "intends," "plans," "predicts," "believes," "seeks," "estimates," "may," "will," "should," "would," "potential," "continue," similar expressions, and variations or negatives of these words. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. These forward-looking statements speak only as of the date hereof and are based upon the information available to us at this time. Such information is subject to change, and we will not necessarily inform you of such changes. These statements are not guarantees of future performance and are subject to risks, uncertainties and assumptions that are difficult to predict. Therefore, our actual results could differ materially and adversely from those expressed in any forward-looking statements as a result of various factors.
Important factors that may cause such a difference for Broadcom include, but are not limited to, general economic and political conditions and specific conditions in the markets we address, including the continuing significant economic slowdown and volatility in the technology sector and semiconductor industry; trends in the broadband communications markets in various geographic regions; possible disruption in commercial activities related to terrorist activity or armed conflict in the United States and other locations; our ability to specify, develop or acquire, complete, introduce, market and transition to volume production new products and technologies in a timely manner; the rate at which our present and future customers and end-users adopt Broadcom's technologies and products in our target markets; delays in the adoption and acceptance of industry standards in the foregoing markets; the effects of new and emerging technologies; competitive pressures and other factors such as the qualification, availability and pricing of competing products and technologies and the resulting effects on sales and pricing of our products; the timing of customer-industry qualification and certification of our products and the risks of non-qualification or non-certification; fluctuations in the manufacturing yields of our third party semiconductor foundries and other problems or delays in the fabrication, assembly, testing or delivery of our products; intellectual property disputes and customer indemnification claims and other types of litigation risk; the risks of producing products with new suppliers and at new fabrication and assembly facilities; problems or delays that we may face in shifting our products to smaller geometry process technologies and in achieving higher levels of design integration; the availability and pricing of third party semiconductor foundry and assembly capacity and raw materials; the quality of our products and any remediation costs; the timing, rescheduling or cancellations of significant customer orders and the ability of our customers to manage their inventories; the loss of a key customer; the effectiveness of our expense and product cost control and reduction efforts; changes in our product or customer mix; the volume of our product sales and pricing concessions on volume sales; our ability to retain and hire key executives, technical personnel and other employees in the numbers, with the capabilities, and at the compensation levels needed to implement our business and product plans; the risks inherent in our acquisitions of technologies and businesses, including the successful completion of technology and product development through volume production, integration issues and costs, related accounting charges, and contractual intellectual, property and other issues; the effects of natural disasters, international conflicts and other events beyond our control; and other factors.
Broadcom's Annual Report on Form 10-K, subsequent and forthcoming Quarterly Reports on Form 10-Q, recent Current Reports on Form 8-K, and other Securities and Exchange Commission filings discuss the foregoing risks as well as other important risk factors that could contribute to such differences or otherwise affect our business, results of operations and financial condition. We undertake no obligation to revise or update publicly any forward-looking statement for any reason.
Broadcom®, the pulse logo®, Connecting everything(TM), Grand Champion(TM), Mobilink(TM), NetXtreme(TM), Propane(TM), ServerWorks(TM), SiByte(TM), StrataXGS(TM) and SystemI/O(TM) are trademarks of Broadcom Corporation and/or its affiliates in the United States and certain other countries. Bluetooth(TM) is a trademark owned by Telefonaktiebolaget LM Ericsson AB and licensed to participants in the Bluetooth Special Interest Group (SIG) in the United States and certain other countries. Compaq® and Evo(TM) are trademarks of Compaq Information Technologies Group, L.P. OpENS(TM) is a trademark of Radlan, Inc. MIPS® is a registered trademark of MIPS Technologies, Inc. HomePNA(TM) is a trademark of the Home Phoneline Networking Alliance. DOCSIS(TM) is a trademark of Cable Television Laboratories, Inc. All other trademarks mentioned are the property of their respective owners.
Broadcom Business Press Contact
Bill Blanning
Sr. Director, Corporate Communications
949-585-5555
blanning@broadcom.com
Broadcom Investor Relations Contact
Nick Kormeluk
Director, Investor Relations
949-585-6932
nickk@broadcom.com
BROADCOM CORPORATION
Unaudited Pro Forma Consolidated Statements of Operations
(In thousands, except per share amounts)
Three Months Ended Six Months Ended
June 30, June 30,
2002 2001 2002 2001
Net revenue $258,203 $210,908 $497,003 $521,409
Cost of revenue 126,590 113,930 244,187 261,273
Gross profit 131,613 96,978 252,816 260,136
Operating expense:
Research and
development 114,621 115,861 226,088 224,595
Selling, general and
administrative 40,556 38,680 80,954 77,501
Loss from
operations (23,564) (57,563) (54,226) (41,960)
Interest income, net 3,313 6,495 6,753 14,635
Other expense, net (754) (270) (955) (1,387)
Loss before
income taxes (21,005) (51,338) (48,428) (28,712)
Benefit for
income taxes (4,201) (10,267) (9,685) (5,742)
Pro forma net loss $(16,804) $(41,071) $(38,743) $(22,970)
Pro forma basic
and diluted loss
per share $(.06) $(.16) $(.15) $(.09)
Weighted average shares
(basic and diluted) 265,356 252,399 263,678 251,044
Pro Forma Only
The above pro forma statements are based upon our unaudited consolidated
statements of operations for the periods shown, with certain adjustments.
This presentation is not in accordance with, or an alternative for,
Generally Accepted Accounting Principles ("GAAP") and may not be
consistent with the presentation used by other companies. However, the
Company believes this presentation provides its investors with additional
insight into its underlying operating results, and the Company uses this
presentation internally to evaluate its operating performance.
BROADCOM CORPORATION
Unaudited Reconciliation of Pro Forma Adjustments
(In thousands)
The following represents a reconciliation (unaudited) of pro forma net
loss to GAAP net loss. The reconciling amounts are substantially non-cash
and relate primarily to the Company's acquisitions.
Three Months Ended Six Months Ended
June 30, June 30,
2002 2001 2002 2001
Pro forma net loss $(16,804) $(41,071) $(38,743) $(22,970)
Acquisition-related
and other special
charges:
Stock-based
compensation (85,026) (139,439) (189,839) (259,089)
Payroll tax expense
on option exercises (171) (379) (486) (1,894)
Amortization of
purchased
intangible
assets (19,509) (20,290) (38,057) (37,965)
Restructuring costs -- (18,235) (4,822) (18,235)
Amortization
of goodwill -- (206,713) -- (407,370)
In-process research
and development -- -- -- (109,710)
Litigation settlement
costs -- -- -- (3,000)
Loss on strategic
investments -- -- (4,146) --
Non-operating gains 1,182 -- 1,182 --
Income tax effects (9,090) (10,267) (20,574) 66,987
GAAP net loss $(129,418) $(436,394) $(295,485) $(793,246)
BROADCOM CORPORATION
Unaudited GAAP Consolidated Statements of Operations
(In thousands, except per share amounts)
Three Months Ended Six Months Ended
June 30, June 30,
2002 2001 2002 2001
Net revenue $258,203 $210,908 $497,003 $521,409
Cost of revenue (1) 143,577 132,564 277,699 295,516
Gross profit 114,626 78,344 219,304 225,893
Operating expense:
Research and
development (2) (3) 114,727 116,072 226,421 225,604
Selling, general and
administrative (2) (3) 40,607 38,820 81,081 78,224
Stock-based
compensation (4) 81,696 134,221 183,160 249,974
Amortization
of purchased
intangible assets (4) 5,866 6,902 11,250 12,999
Restructuring costs -- 18,235 4,822 18,235
Amortization of
goodwill (4) -- 206,713 -- 407,370
In-process research
and development (4) -- -- -- 109,710
Litigation settlement
costs -- -- -- 3,000
Loss from operations (128,270) (442,619) (287,430) (879,223)
Interest income, net 3,313 6,495 6,753 14,635
Other income (expense),
net 428 (270) (3,919) (1,387)
Loss before income
taxes (124,529) (436,394) (284,596) (865,975)
Provision (benefit)
for income taxes 4,889 -- 10,889 (72,729)
Net loss $(129,418) $(436,394) $(295,485) $(793,246)
Basic and diluted loss
per share $(.49) $(1.73) $(1.12) $(3.16)
Weighted average shares
(basic and diluted) 265,356 252,399 263,678 251,044
Notes:
(1) Cost of revenue
includes the following:
Stock-based
compensation
expense $3,330 $5,218 $6,679 $9,115
Amortization of
purchased
intangible assets 13,643 13,388 26,807 24,966
Payroll tax expense
on certain stock
option exercises 14 28 26 162
$16,987 $18,634 $33,512 $34,243
(2) Stock-based compensation
expense is excluded
from the following:
Research and
development $55,007 $86,333 $124,793 $163,813
Selling, general and
administrative 26,689 47,888 58,367 86,161
$81,696 $134,221 $183,160 $249,974
Amortization of
purchased intangible
assets is excluded
from the following:
Research and
development $4,903 $6,680 $10,064 $12,566
Selling, general
and administrative 963 222 1,186 433
$5,866 $6,902 $11,250 $12,999
(3) Employer payroll
tax expense on
certain stock
option exercises
is included in
the following:
Research and
development $106 $211 $333 $1,009
Selling, general
and administrative 51 140 127 723
$157 $351 $460 $1,732
(4) Represents non-cash acquisition-related expenses charged to
operations.
BROADCOM CORPORATION
Unaudited Condensed Consolidated Balance Sheets
(In thousands)
June 30, December 31,
2002 2001
ASSETS
Current assets:
Cash and cash equivalents $365,906 $403,758
Short-term marketable securities 212,845 136,028
Accounts receivable, net 93,344 57,187
Inventory 29,380 22,267
Deferred taxes 13,651 13,651
Prepaid expenses and other current assets 35,613 40,840
Total current assets 750,739 673,731
Property and equipment, net 177,119 157,336
Long-term marketable securities 53,483 109,767
Deferred taxes 268,287 275,916
Goodwill, net 2,427,411 2,241,632
Purchased intangible assets, net 64,398 97,108
Other assets 67,999 67,808
Total assets $3,809,436 $3,623,298
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $153,860 $103,032
Wages and related benefits 38,510 35,839
Deferred revenue 22,403 29,495
Accrued liabilities 180,668 129,476
Short-term debt and current portion of
long-term debt 116,379 114,040
Total current liabilities 511,820 411,882
Long-term debt, less current portion 3,365 4,006
Shareholders' equity 3,294,251 3,207,410
Total liabilities and shareholders'
equity $3,809,436 $3,623,298
12:08 ET Stocks hit by Philly Fed : The Dow fell about 60 pts on the Philly Fed data. Though the report was clearly weaker than consensus, anyone who looks at the history of this series vs national economic trends would be amazed at the size of this market reaction. This manufacturing survey encompasses only the Philly Fed district, and the overall index simply questions respondents on their sentiment about business (a very unscientific reading). If you look at the various questions about orders, shipments, etc and then calculate an index using the ISM index methodology, the Philly index would have fallen to 49.2% from 54.4% - still a decline, but not nearly as bad as the 22.2 to 6.6 plunge suggests.
12:00 ET Philly Fed index falls to 6.6; much weaker than 18.0 consensus : The always volatile Philly Fed manufacturing index didn't fail this month - it fell sharply to 6.6 in July from 22.2 in June, well below the 18.0 consensus. This might prompt a brief market reaction, though it should be noted that such volatility is normal for this index and seldom tells us much about the direction of the overall economy.
12:00 ET Philly Fed index falls to 6.6; much weaker than 18.0 consensus :
18:06 ET Siebel Systems (SEBL) 11.74 +0.36: Finally, getting to guidance... Sees Q3 sales of $355 - $400 mln, with license revenue in range of $145-180 mln... EPS of $0.05 to $0.08.. Multex consensus estimates for Q3 are/were $0.10 and $437.35 mln... Notes that Q4 will probably be like Q3, though tone suggests that management has little confidence in that forecast... Would optimistically put FY02 earnings at $0.34 v. consensus estimate of $0.43... Using middle of range, closer to $0.31.
18:02 ET After Hours Movers : Prices vs 4 pm ET close -- IBM +1.11, SEBL -0.89, SNDK +1.50, AMD -0.75, SYMC -0.90, IDPH -0.56, CTXS -0.06, EXTR -0.77, CERN +1.24
17:57 ET Siebel Systems (SEBL) 11.74 +0.36: On call, a deflated CEO, Tom Siebel, notes that conditions remain very difficult and that company sees no pick-up in short term... Sees growth constrained by soft economy.
Well just about everything took a dive in AH..... QQQ's below $25.14
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17:57 ET Siebel Systems (SEBL) 11.74 +0.36: On call, a deflated CEO, Tom Siebel, notes that conditions remain very difficult and that company sees no pick-up in short term... Sees growth constrained by soft economy.
17:56 ET After Hours Indications : The late session tone is negative. S&P futures at 903, trade four points under fair value while the Nasdaq 100 after hours indicator is lower by 3.6 points.
17:43 ET Extreme Networks doesn't provide guidance (EXTR) 11.42 -0.35: -- Update -- On conference call, company says it will not provide any specific financial guidance due to uncertain business conditions; market had been expecting slight sequential improvement in the Sep qtr to $0.04 and $115.3 mln; stock at 11.00 after hours - could be some disappointment that company failed to offer guidance.
17:48 ET Extreme Networks on book/bill (EXTR) 11.42 -0.35: -- Update -- In Q&A session, an analyst says he thought company needed a 1.05 book/bill ratio to offset Sep qtr seasonal weakness; though company wouldn't give specific number, book/bill was over 1.0 and they sounded comfortable with the analyst's assumption.
"One never knows, you could be run over by a Kosher Dill pickle truck tomorrow and then where would your followers be?"
Hmmmmm...... Well, at least we'd have pickled turnips :-o
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17:28 ET Siebel Systems (SEBL) 11.74 +0.36: More bad news from report: Gross margins slipped to 69.2% from 72.5% last quarter and 72.4% in year-ago period... License revenue of $170.1 mln was way below street view... General view was that market would react negatively to anything under $200 mln... Fact that license revenue now only 42% of total revenues (down from 51.5% last quarter) one reason why margins fell so much... Trend needs to be reversed or company in trouble longer-term... Conference call about to begin.
17:23 ET IBM affirms full year guidance (IBM) 70.69 +1.68: -- Update -- On call, company says the current consensus estimate of $4.00 per share (excluding charges) this year is "about right." However, Multex consensus is $4.10, but management made it sound as if the new model of continuing ops is in line with consensus... Also, the downside in IT demand is being offset by changes made at IBM... stock at 70.99.
17:22 ET Siebel Systems misses by three cents (SEBL) 11.74 +0.36: Reports Q2 (Jun) earnings of $0.06 per share, $0.03 worse than the Multex consensus of $0.09; revenues fell 27.6% year/year to $405.6 mln vs the $439.6 mln consensus.
17:08 ET IBM (IBM) 70.69 +1.68: -- Update -- On conference call, company lowers second half forecast for its Global Services division to "modest revenue growth" from its earlier forecast of double digit growth... Stock at 71.10.
17:06 ET Advanced Micro misses earnings estimates (AMD) 9.33 -0.07: Company reports Q2 net loss of $0.54 per share, $0.09 worse than the Multex consensus; Q2 revs came in at $600 mln vs the consensus of $600 mln; note that the earnings miss comes despite two earnings warnings issued during the quarter; expects sequential flash growth which fits with the strength in SNDK's results; AMD sees Q3 sales up modestly vs the current consensus estimate for sales of $670 mln.
AMD Reports Second Quarter Results
Cites Weak PC Market Demand
Improving Flash Outlook
SUNNYVALE, Calif.--(BUSINESS WIRE)--July 17, 2002--AMD (NYSE:AMD - News) today reported sales of $600,299,000 and a net loss of $184,938,000, for the quarter ended June 30, 2002. The net loss amounted to $0.54 per share.
Second quarter sales declined by 39 percent from the second quarter of 2001 and by 33 percent from the first quarter of 2002. In the second quarter of 2001, AMD reported total sales of $985,264,000 and net income of $17,352,000, or $0.05 per diluted share. In the first quarter of 2002, AMD reported sales of $902,073,000 and a net loss of $9,163,000, or $0.03 per share.
For the first six months of 2002, sales declined by 31 percent from the first six months of 2001. AMD reported sales of $1,502,372,000 and a net loss of $194,101,000, or $0.57 per share. For the first six months of 2001, AMD reported sales of $2,174,011,000 and net income of $142,189,000, or $0.43 per diluted share.
"A weaker than expected PC market, particularly in North America and Europe, resulted in soft microprocessor demand in a highly competitive market," said Robert J. Rivet, AMD's chief financial officer. "Flash memory product sales improved in the second quarter based on the strength of the high-end mobile phone market, as consumers are buying feature-rich phones built with high-density, high performance flash memory. The successful introduction of AMD MirrorBit(TM) technology has given us competitive momentum."
BUSINESS OVERVIEW
PC processor sales of $380 million for the quarter fell by 35 percent compared to $588 million in the second quarter of 2001. Processor sales declined by 44 percent from the $684 million reported in the first quarter of 2002. Desktop unit sales were down while mobile processor unit sales were flat.
AMD lowered processor inventories in the PC supply chain in the second quarter to help better position its customers in the current market environment.
AMD has completed its conversion from 180-nanometer to 130-nanometer technology. The Company's Fab 30 plant in Dresden, Germany is now producing 100 percent of its wafer starts in 130-nanometer technology, and will have all wafer outs in 130-nanometer technology in the fourth quarter. AMD is the only microprocessor company with all of its microprocessor production in 130-nanometer technology.
Development roadmaps for AMD Athlon(TM) and AMD Opteron(TM) PC processors based on Hammer technology continue on schedule. AMD plans to begin production shipments of AMD Athlon PC processors based on Hammer technology in the fourth quarter.
Second quarter sales of AMD memory products were down 45 percent compared to the second quarter of 2001, and were up nine percent from the first quarter of 2002. Memory sales were $175 million in the second quarter compared with $316 million in second quarter of 2001 and $160 million in the first quarter of 2002. AMD flash memory unit shipments increased in the second quarter of 2002 and bit shipments were a record.
ADDITIONAL HIGHLIGHTS OF THE QUARTER
In April, AMD announced that it is collaborating with Microsoft to incorporate 64-bit support for AMD Athlon and AMD Opteron processors based on Hammer technology into the Windows® operating system. AMD demonstrated at its annual shareholders meeting an AMD Opteron dual processor-based server running a developmental 64-bit version of Windows.
In April, AMD announced the AMD Athlon XP mobile processor, manufactured on state-of-the-art 130-nanometer technology.
In April, AMD announced the introduction of the Alchemy(TM) Au1100(TM) processor, targeting the non-PC mobile Internet appliance market, such as web pads, telematics, and PDAs, offering an industry-leading combination of high performance, low power and high integration.
In May, AMD announced the Fab 25 manufacturing facility in Austin, Texas is in volume production of Flash memory devices utilizing 170-nanometer technology.
In May, AMD, Infineon Technologies AG and DuPont Photomasks, Inc. announced plans to establish and operate a new advanced photomask facility in Dresden, Germany.
Also in May, AMD announced that it will be providing assistance to UNETE (Union de Empresarios para la Tecnologia en la Educacion, A.C.), a private organization in Mexico dedicated to building computer labs in Mexican schools. Hector Ruiz, president and CEO of AMD, met with President Vicente Fox of Mexico where the two discussed AMD's desire to help bring computer technology to the classrooms of Mexico and AMD's increasing commitment to the IT industry in Mexico.
In June at Computex Taipei 2002, AMD demonstrated a four-way multiprocessor server, based on the AMD Opteron processor. The demonstration marked the first-ever public showing of a four-way multiprocessor platform by AMD, and illustrated AMD's growing performance and competitiveness in addressing the server market. Also at Computex Taipei, more than 35 leading hardware infrastructure vendors announced plans to support AMD Opteron and AMD Athlon processors based on Hammer technology.
In June, the AMD Athlon XP processor won the 2002 PC World World Class Award for Computer Product of the Year. In all, the AMD Athlon processor family and systems based on such processors have won more than 100 awards worldwide.
CURRENT OUTLOOK
AMD's outlook statements are based on current expectations. The following statements are forward-looking, and actual results could differ materially. Economic and industry conditions remain uncertain, and continue to make it particularly difficult to forecast product demand. The company's current outlook for the third quarter is based on the following projections:
The company expects sequential sales growth of flash memory devices.
The company expects unit sales of PC processors will follow seasonal patterns, which generally show sequential increases from second quarter levels.
AMD aggregate sales are currently expected to improve modestly in the third quarter compared to the second quarter. This forecast is dependent upon demand and PC processor pricing patterns in a weak PC market and the rate of growth in an improving flash memory market. At these sales levels, AMD expects to report a loss in the third quarter.
AMD Teleconference
AMD will hold a conference call for the financial community at 2:30 PM Pacific Time today to discuss second quarter financial results. AMD will provide a real-time audio broadcast of the teleconference on the Investor Relations page of its web site at http://www.amd.com or http://www.StreetEvents.com. The web-cast will be available for two weeks after the conference call.
CAUTIONARY STATEMENT
This release contains forward-looking statements, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that forward-looking statements in this release involve risks and uncertainty that could cause actual results to differ materially from current expectations. Risks include the possibility that global business and economic conditions will worsen resulting in lower than currently expected sales in the third quarter of 2002; that Intel Corporation pricing, marketing programs, product bundling, new product introductions or other activities targeting the company's processor business will prevent attainment of the company's current PC processor sales plans; that demand for personal computers and, in turn, demand for the company's PC processors will be lower than currently expected; that the sales of PC processors will not follow seasonal patterns and increase from second quarter levels; that the company will not continue to be successful in ramping production of the company's AMD Athlon XP processors on 130-nanometer technology in Fab 30 in Dresden, Germany, on the current schedule; that demand for the company's flash memory products will be lower than currently expected, particularly in the cellular telephone sector; that the company will not achieve sequential growth in sales of flash memory devices; and that the company may not achieve its current product and technology introduction schedules. We urge investors to review in detail the risks and uncertainties in the company's Securities and Exchange Commission filings, including but not limited to the report on Form 10-K for the year ended December 30, 2001 and the report on Form 10-Q for the quarter ended March 31, 2002.
About AMD
AMD is a global supplier of integrated circuits for the personal and networked computer and communications markets with manufacturing facilities in the United States, Europe, Japan, and Asia. AMD, a Fortune 500 and Standard & Poor's 500 company, produces microprocessors, Flash memory devices, and support circuitry for communications and networking applications. Founded in 1969 and based in Sunnyvale, California, AMD had revenues of $3.9 billion in 2001. (NYSE: AMD - News).
AMD, the AMD Arrow logo, and combinations thereof are trademarks of Advanced Micro Devices, Inc. in the United States and other jurisdictions.
Advanced Micro Devices, Inc.
NON-GAAP CONSOLIDATED STATEMENTS OF OPERATIONS
(Includes Pre-Tax FASL Equity Investment (Income) loss
in Operating Income (loss))
(Thousands except per share amounts)
Quarter Ended Six Months Ended
(Unaudited) (Unaudited)
June 30, March 31, July 1, June 30, July 1,
2002 2002 2001 2002 2001
-------------------------------------------------------
Net sales $ 600,299 $902,073 $985,264 $1,502,372 $2,174,011
Cost of sales 558,290 586,874 636,199 1,145,164 1,351,029
(Income) loss
from equity
investment
in FASL 4,630 (5,076) (12,521) (446) (35,133)
Research and
development 178,425 171,882 171,114 350,307 328,874
Marketing,
general and
administrative 160,248 156,860 156,291 317,108 305,429
-------------------------------------------------------
901,593 910,540 951,083 1,812,133 1,950,199
-------------------------------------------------------
Operating
income (loss) (301,294) (8,467) 34,181 (309,761) 223,812
Interest and
other income,
net 8,661 9,538 12,308 18,199 31,131
Interest
expense (15,729) (12,158) (20,199) (27,887) (41,844)
-------------------------------------------------------
Income (loss)
before income
taxes (308,362) (11,087) 26,290 (319,449) 213,099
Provision
(benefit) for
income taxes (121,493) (4,041) 3,717 (125,534) 56,260
Provision
(benefit) for
taxes on
equity
income (loss)
in FASL (1,931) 2,117 5,221 186 14,650
-------------------------------------------------------
Net income
(loss) $(184,938) $ (9,163) $ 17,352 $ (194,101) $ 142,189
-------------------------------------------------------
Net income
(loss) per
common share
Basic $ (0.54) $ (0.03) $ 0.05 $ (0.57) $ 0.44
Diluted $ (0.54) $ (0.03) $ 0.05 $ (0.57) $ 0.43
-------------------------------------------------------
Shares used in per share calculation
-- Basic 341,782 340,806 330,120 341,294 322,234
-- Diluted 341,782 340,806 340,533 341,294 332,183
-------------------------------------------------------
Advanced Micro Devices, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Thousands except per share amounts)
Quarter Ended Six Months Ended
(Unaudited) (Unaudited)
June 30, March 31, July 1, June 30, July 1,
2002 2002 2001 2002 2001
------------------------------------------------------
Net sales $ 600,299 $902,073 $985,264 $1,502,372 $2,174,011
Cost of sales 558,290 586,874 636,199 1,145,164 1,351,029
Research and
development 178,425 171,882 171,114 350,307 328,874
Marketing,
general and
administrative 160,248 156,860 156,291 317,108 305,429
------------------------------------------------------
896,963 915,616 963,604 1,812,579 1,985,332
------------------------------------------------------
Operating income
(loss) (296,664) (13,543) 21,660 (310,207) 188,679
Interest and
other income,
net 8,661 9,538 12,308 18,199 31,131
Interest expense (15,729) (12,158) (20,199) (27,887) (41,844)
------------------------------------------------------
Income (loss)
before income
taxes and equity
in net income
(loss) of joint
venture (303,732) (16,163) 13,769 (319,895) 177,966
Provision
(benefit) for
income taxes (121,493) (4,041) 3,717 (125,534) 56,260
------------------------------------------------------
Income (loss)
before equity
in net income
(loss) of joint
venture (182,239) (12,122) 10,052 (194,361) 121,706
Equity in net
income (loss) of
joint venture (2,699) 2,959 7,300 260 20,483
------------------------------------------------------
Net income
(loss) $(184,938) $ (9,163) $ 17,352 $ (194,101) $ 142,189
------------------------------------------------------
Net income (loss) per common share
Basic:
Net income
(loss) $ (0.54) $ (0.03) $ 0.05 $ (0.57) $ 0.44
Diluted:
Net income
(loss) $ (0.54) $ (0.03) $ 0.05 $ (0.57) $ 0.43
------------------------------------------------------
Shares used in per share calculation
- Basic 341,782 340,806 330,120 341,294 322,234
- Diluted 341,782 340,806 340,533 341,294 332,183
------------------------------------------------------
Advanced Micro Devices, Inc.
CONSOLIDATED BALANCE SHEETS
(Thousands)
June 30, March 31, Dec. 30,
2002 2002 2001(a)
------------------------------------
(unaudited) (unaudited)
Assets
Current assets:
Cash, cash equivalents and
short-term investments $1,099,943 $1,276,723 $ 869,997
Accounts receivable, net 534,929 692,165 659,783
Inventories 380,078 376,795 380,474
Deferred income taxes 236,152 162,820 155,898
Prepaid expenses and other
current assets 166,963 151,377 286,957
---------------------------------------------------------------------
Total current assets 2,418,065 2,659,880 2,353,109
Property, plant and equipment,
net 2,934,877 2,769,234 2,739,138
Investment in joint venture 378,164 353,352 363,611
Other assets 171,936 182,476 191,384
---------------------------------------------------------------------
$5,903,042 $5,964,942 $5,647,242
=====================================================================
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 258,641 $ 383,495 $ 304,990
Accrued compensation and
benefits 128,641 133,401 129,042
Accrued liabilities 343,289 321,953 443,995
Income taxes payable 37,824 56,113 56,234
Deferred income on shipments to
distributors 38,381 68,016 47,978
Current portion of long-term debt,
capital lease obligations
and other 367,360 264,029 331,698
---------------------------------------------------------------------
Total current liabilities 1,174,136 1,227,007 1,313,937
Deferred income taxes 75,438 104,661 105,305
Long-term debt, capital lease
obligations and other, less
current portion 1,141,060 1,123,671 672,945
Stockholders' equity:
Capital stock:
Common stock, par value 3,423 3,414 3,405
Capital in excess of par value 1,906,952 1,898,349 1,889,217
Retained earnings 1,601,580 1,786,517 1,795,680
Accumulated other comprehensive
income (loss) 453 (178,677) (133,247)
---------------------------------------------------------------------
Total stockholders' equity 3,512,408 3,509,603 3,555,055
---------------------------------------------------------------------
$5,903,042 $5,964,942 $5,647,242
=====================================================================
(a) Derived from the December 30, 2001 audited financial statements of
Advanced Micro Devices, Inc.
AMD
Selected Corporate Data
(Unaudited)
Segment Breakdown Q2 '02 Q1 '02 Q2 '01
% of % of % of
Sales Revenue Sales Revenue Sales Revenue
--------------------------------------------
Core Products segment:
PC Processor Products 63 $380M 76 $684M 60 $588M
Memory Products (Flash) 29 175M 18 160M 32 316M
Other IC Products 7 39M 5 46M 5 51M
Foundry Services segment 1 6M 1 12M 3 30M
----------------------------------------------------------------------
Other Data Q2 '02 Q1 '02 Q2 '01
--------------------------------------------
Depreciation and Amortization $183M $174M $159M
Capital Additions $172M $199M $215M
Headcount 13,730 14,442 15,088
----------------------------------------------------------------------
International Sales 72% 65% 61%
Research and Development $178M $172M $171M
EBITDA -$114M $161M $181M
EBITDA (Non-GAAP) -$118M $166M $194M
Segment Breakdown 2002 2001
% of % of
Sales Revenue Sales Revenue
-----------------------------------
Core Products segment:
PC Processor Products 71 $1,064M 58 $1,249M
Memory Products (Flash) 22 335M 33 727M
Other IC Products 6 85M 6 126M
Foundry Services segment 1 18M 3 72M
Other Data 2002 2001
----------------------------------
Depreciation and Amortization $357M $312M
Capital Additions $371M $378M
Headcount 13,730 15,088
----------------------------------------------------------------------
International Sales 68% 62%
Research and Development $350M $329M
EBITDA $47M $501M
EBITDA (Non-GAAP) $47M $536M
Extreme Networks posts Q4 profit, revenue down
SANTA CLARA, Calif., July 17 (Reuters) - Extreme Networks Inc. (NasdaqNM:EXTR - News) on Wednesday posted a fiscal fourth-quarter profit compared with a year-earlier loss despite lower demand for network gear from the battered telecommunications industry and cost-cutting customers.
Extreme reported earnings of $2.5 million in its fiscal fourth quarter ended June 30, or 2 cents per share, compared with a loss of $11.4 million, or 10 cents per share, a year earlier.
Revenue was $113.1 million, compared with $115.1 million a year earlier.
Excluding one-time items, Extreme's earnings were $3.8 million, or 3 cents per share, compared with earnings excluding charges of $1.3 million, or 1 cent per share, a year earlier. Analysts, on average, expected earnings excluding charges of 3 cents per share, according to Thomson First Call.
http://biz.yahoo.com/rc/020717/tech_extremenetworks_earns_1.html
Apple Shows Off New Products, Warns on Economy
By Ellen Wulfhorst and Peter Henderson
NEW YORK/SAN FRANCISCO (Reuters) - Apple Computer Inc. (NasdaqNM:AAPL - News) Chief Executive Steve Jobs on Wednesday unveiled new software and gadgets to win over Windows users during an economic downturn he forecast could last another nine months.
As Apple stock sank 13 percent following its disappointing results and a somber financial outlook announced on Tuesday, Jobs showed off an iPod portable music player that works with Windows and Macintosh software that will be free to new users.
But loyal Apple fans also will have to begin paying to use a ".mac" e-mail address and Internet storage and tools Apple had offered for free, sparking some dissent among users of the platform, which is seen as the pricey high end of personal computers.
Jobs told financial analysts at a meeting alongside the Macworld exposition in New York, where he introduced the new products, that the company would not cut key research spending or marketing of its new campaign to convince Windows users to switch to the Mac.
"In hindsight, this downturn is going to look like one hell of a great time to try to gain back some market share for Apple, and that is exactly what we are trying to do right now," Jobs said. Apple has struggled to increase its roughly 5 percent share of the U.S. PC market for years.
But, he added, "We play the hand we're dealt. We don't see things getting better in the next six months, probably the next nine months, and that's as far as our headlights go out."
Apple predicted a slight profit for the current quarter before potential charges that could push it to a net loss for the first time since the end of 2000, an outlook that led analysts to cut financial targets for the company.
Salomon Smith Barney also cut the rating on Apple stock to neutral from buy. Apple fell $2.23 to close at $15.63 on Nasdaq.
Analysts at the meeting expressed dismay at the poor "legs" of Apple's iMac, the desktop computer introduced at the beginning of the year which is shaped like a desktop lamp with a flat panel display swinging above a hemispherical base.
Revenue from the iMac fell in the quarter ended in June, a drop that Jobs blamed on a combination of the poor economy and high prices for the flat panel displays.
He also unveiled a new $1,999 high-end iMac with a 17-inch screen, which drew sighs and howls of appreciation at Macworld. Apple left the price of its cheapest iMac at $1,399, which many analysts call a good value but too expensive for many consumers used to cheap Microsoft Corp. (NasdaqNM:MSFT - News) Windows machines.
Some users at the "news for nerds" Web site slashdot.com said that Apple was rolling out a lot of charges.
"Some have suggested that the 'switch' in Apple's new ad campaign stands for the unfortunate part of a 'bait and switch,"' one wrote in response to the $99 per year price tag for the .Mac tools.
Many lauded improvements to the OS X software such as improved address books and communications between computers and cell phones.
Chief Financial Officer Fred Anderson also said that there would be more new products this quarter and that Apple intended to price them competitively.
Executives said the company was holding the line on expenses, including opening smaller stores as it continues a retail roll-out begun last year.
Some analysts have also urged Apple to move to microchips from Intel Corp. (NasdaqNM:INTC - News) from those made by Motorola Inc. (NYSE:MOT - News) and International Business Machines Corp. (NYSE:IBM - News) to cut costs.
Asked about that possibility, Jobs said that first the company had to finish the transition to the OS X operating system, expected around the end of this year.
"Then we'll have options, and we like to have options," he said.
http://biz.yahoo.com/rf/020717/tech_apple_1.html
IBM posts sharp drop in quarterly profits
ARMONK, N.Y., July 17 (Reuters) -International Business Machines Corp. (NYSE:IBM - News) on Wednesday said its profit fell sharply for the fourth quarter in a row, as corporations worried about their own stagnant bottom lines spent less on technology.
IBM, which sells everything from computer software to microchips to computer services, said it earned 3 cents per share in the second quarter, down from $1.15 per share a year earlier.
The No. 1 computer maker said it earned 84 cents per share excluding charges of 81 cents per share to cover job cuts, a reorganization of its microelectronics division and for its money-losing hard disk drive business.
The Armonk, New York-based company, whose results are a bellwether for the influential technology industry, announced plans to sell most of its hard-disk drive assets to Hitachi Ltd. for $2.05 billion at the beginning of June.
http://biz.yahoo.com/rf/020717/tech_ibm_earns_1.html
17:19 ET Apple Computer (AAPL) 17.86 -0.37: On call, management sees Q4 sales in line with Q3 number of $1.4 bln... Below consensus estimate of $1.5 bln... Gross margins seen falling by 100 basis points due to mix and more aggressive pricing, especially in Europe... Sees operating expense for Q4 jumping by about $12 mln to $390 mln... End result, sees a "slightly profitable" quarter, prior to non-recurring charges... Note that street was looking for a gain of $0.14... Stock trading at 16.55 after hours.
17:14 ET Apple Computer (AAPL) 17.86 -0.37: On call, company notes revenues and CPU unit shipments fell shy of estimates by $171 mln and 100,000 units... Roughly half of shortfall due to weakness in European sales... Sequential unit shipments in Europe and Japan fell by 24% and 25% respectively... Flat panel IMac and Powerbook sales fell well below estimates as demand dried up late in May and into June... Gross margins flat from quarter to quarter (27.4%) - had expected slight rise... Change in tax rate for quarter from 28% to 18% resulted in one cent benefit to earnings.
17:11 ET UBS semi equipment ratings changes : After the close, UBS Warburg upgraded KLA Tencor (KLAC 44.73) to BUY from Hold. UBS also downgraded ASM Intl (ASMI 17.40) to HOLD from Buy, and Varian Semi (VSEA 35.41) to BUY from Strong Buy.
16:28 ET Intel (INTC) 18.36 -0.76: -- Update - Revenues fell 0.2% year/year to $6.32 bln vs the $6.34 bln consensus. Capital spending for 2002 is expected to be between $5.0 billion and $5.2 billion, lower than the previous expectation of $5.5 billion. Revenue in the third quarter is expected to be between $6.3 billion and $6.9 billion (consensus $6.71 bln). Still working on EPS figure. The 7 cent headline included a charge and does not appear to be comparable to the 11 cent consensus.
INTC tanking.....
<edit> now bouncing between $17.80 & $18.15.... crazy
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Another Top Exec Flees Cisco
By Scott Moritz
Senior Writer
07/16/2002 01:36 PM EDT
The Cisco (CSCO:Nasdaq - news - commentary - research - analysis) shuffle continued Tuesday, further thinning the top ranks of the nation's leading maker of network gear.
Ten-year veteran William Nuti, once seen as a strong candidate to succeed loquacious CEO John Chambers, left Cisco to take the chief operating officer spot at Symbol Technologies (SBL:NYSE - news - commentary - research - analysis). In quitting a high-profile post at Cisco to take the No. 2 job at a quiet Long Island-based maker of bar code and wireless data gear, Nuti raised some eyebrows about the Chambers succession race and the fate of a struggling unit he headed.
But others saw the move as merely another acknowledgment that like its struggling peers, Cisco must slim down if it is to hold onto its slice of the shrinking telecommunications equipment pie. Mostly sitting out a minor but broad-based tech rally, Cisco was up 8 cents around midday at $14.52.
Shrinkage
The 38-year-old Nuti had run several Cisco businesses in his ascent through the executive suites. Most recently, Nuti was the head of Cisco's U.S. operations and its struggling telecom gear division. That unit once was seen as Cisco's ticket to sustainable growth but now seems to offer little hope amid the ongoing collapse of the telecom business.
Nuti is the second top executive to flee Cisco's disappointing service provider unit in the past year. His predecessor, Kevin Kennedy, left in August when Cisco announced its 11-point reorganization.
Some observers speculate that the recent promotion of Charles Giancarlo to lead Cisco's switching efforts may have been a sign that Nuti at best would share heir apparent status should Chambers step down. That point is notable becauase Chambers's spotlight-seeking has given rise in some circles to an amusing debate over the prospective length of his tenure at Cisco. Some people, it seems, foresee a role in the Bush administration for Chambers, a development that would necessitate having a successor fully up to speed ahead of time.
But reality may be less intriguing. Nuti's defection is more likely part Cisco's efforts to shrink to more realistic sales levels coming off the late '90s Internet boom, says CIBC analyst Steve Kamman.
"They reduced the number of chairs in August, and it's probably going to take another six months before the music stops and we know the actual number of chairs available," says Kamman, who rates Cisco a buy. CIBC has no underwriting ties to Cisco.
Reading a statement regarding Nuti's departure, a Cisco spokeswoman said: "Bill contributed greatly to the Cisco organization. We wish him well in new position."
In a phone interview from his new office, Nuti downplayed the more trepidatious interpretations of his parting with Cisco, and said his move was more about the opportunities at Symbol and less about the challenges at Cisco.
"I'd like to think that I'm going to be a major loss for Cisco, but I think they'll do just fine without me," Nuti said.
The Crazy Train
Kamman and others are also a bit concerned about what Nuti's departure means for Cisco's telecom business, which was once expected to help the data gear king continue its growth momentum into the telecommunications equipment market.
"Cisco was just starting to get to concentrate on the size it needed to service big customers," says Kamman. "So it's hard to tell if this reflects corporate politics or if the service provider business is going off the rails."
In any case, Nuti's move serves him well in at least one important way: It stands to drastically shorten his commute. As Lehman Brothers analyst Tim Luke wrote in a note to investors Tuesday, Nuti lived in New York throughout his Cisco tenure. Now, in another bleak development, some long-distance service provider and the airlines are going to miss out on all that traffic to San Jose.
http://www.thestreet.com/_yahoo/tech/scottmoritz/10031968.html
SOX doing a nose dive.
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Ouch! Too close to home :-
Good one LG!
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NAZ comp, NDX & the QQQ's @ LOD...........
And what a bounce off the lows!
OOF Ö¿Ö
You aren't expecting any EOD short covering bump then?
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Equity P/C almost .5
BKX @ new LOD
INDU about to make new LOD
FUGLY
OOF
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ROTFLMAO! Way cool LG :-o
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With the blue chips down for five straight days, we might see some green at the close......... then a manic Monday perhaps.
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HI LG! Good to see you posting here.
FWIW, NAZ futures are currently +5.85 over fair value...... S&P (Globex) are + .64............
http://money.cnn.com/markets/morning_call/
NAZ Futures have been steadily slipping since 5:30 pm EST....... S&P Futures since 7 pm EST....... (link to chart of futures in mid page of the link from above)
Still, there's plenty of time for it to change....... again :-o
Tim Ö¿Ö
Updated: 12-Jul-02
General Commentary
For quite some time now, we have been focusing mainly on the negatives - there's just been soooo many to pick from it was difficult to do anything else... But today we want to highlight a few of the positives... Not just because the Nasdaq bounced back from early weakness yesterday to close with a modest gain... We predicted as much on this page yesterday... No, we simply want to remind folks that even though it looks very bleak in the markets right now there are some encouraging developments.
Chief among them is the general improvement in the economy... Most noteworthy has been the pick up in business spending, as evidenced by the jump in factory orders, first rise in inventories in 17-months and the rebound in the ISM index... Strength in the trucking industry also a good sign that business activity is on the rise... Given that it was the sharp drop in corporate spending which pushed the economy into recession, improvement on this front is essential to a) a prolonged economic recovery and b) a rebound in earnings... Typically, one would expect the market to be ahead of the economy... Unfortunately, the market noise created by corporate scandals and ongoing global unrest has managed to drown out the favorable changes in the economic backdrop... However, if and when the scandals move off the front page, market attention will eventually shift back to the economy; and when it does, stocks could be in a for a nice lift.
As for earnings, market sold off sharply in advance of Q2 results... Briefing.com notes that it's not unusual for indices to move in the opposite direction of pre-earnings season move... With so much negativity priced into market, even if we don't get a rash of new buying we should at least see some short-covering as the numbers start rolling in -- especially if they aren't terrible... Though it's an admittedly small sample size, the news out of the telecom sector after yesterday's close was good enough to compel shorts to cover, as JNPR, SONS and PWAV posted better than expected sales/earnings numbers.
Other points of interest include the historically high VOX (volatility index) reading and the growing sense of despair -- both are indicative of deeply oversold conditions.
Briefing.com is not suggesting that the bottom is in... However, based on the oversold nature of the market and the potential for some earnings-related short covering, we could see a near-term rebound that retraces between 38-50% of the most recent slide... Longer-term, the market can't ignore the economy forever... If the data continue to improve, so to will the earnings picture... Stock traders will ultimately be forced to take notice.
Robert Walberg, Briefing.com
Bruce? How dare you say something like that!
I say boil a couple of them suckers & serve 'em up with some butter & garlic. That'l get their attention!! <ggg>
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14:30 ET Intel: cautious comments by Lehman (INTC) 17.72 +0.91: -- Update -- Lehman's Dan Niles is reiterating his cautious stance on INTC, saying that although Q2 estimates look reasonable, future consensus expectations may need to come down due to pressure on gross margins and falling avg selling prices.
Zeev,
By now you should know that no matter how consistent your calls may be (and you are one very consistent dude), there are going to be those ankle biters, plus some folks who can't/won't cut their losses when the turnips make a sour batch...... and too often those folks are going to look for someone to blame....... besides themselves of course
regardless of how often you scream to use trailing stops & to cut losses fast.
Hey, I followed the turnips into the abyss these last few days...... C'est la vie.... took a small loss & took a nice gain on today's ramp & I'm going to watch the trend closely before I add more longs or trim my current long holdings........ My turnip portfolio is up over 50% in the last 6 weeks by paying attention to the turnips....... but paying even closer attention to the performance of my portfolio.
BTW, thanks for all you do Zeev.
Tim Ö¿Ö