Zeev's Turnips Patch-No Politics (ZEEV)

[qwave]

if you use the company guidance..

assume an annual product gross margin avg at 32% (34% 1st half, 30% 2nd half)

120 million license revenue with 100% profit margin

for 1.5 billion revenue guidance -

gross profit = (1500-120) * 0.32 + 120 = 561 million

for 1.75 billion rev. guidance =

gross profit = (1750 -120) * 0.32 + 120 = 642 million

opex = 225 million, 265 million for the 1.5/1.75 billion case

net profit = [(gross profit) - opex ] * 0.63 = 212 million or 239 million (for the 1.5/1.75 billion case)..

using the same shrs outstanding (which is unlikely due to options, but i assume the best case) - 95 million shrs

earnings for 2004 will range from 2.23 to 2.51/shr

this seems to me that sndk is sending out a warning vs street expectation.

sndk made 2.3/shr in 2003, seems like sndk will not be able to grow its earnings in 04 due to margin pressure.

hard to justify a 30x p/e on a no growth semis.