Replies to post #195762 on 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.

[Paul A]

Limtex.. I dont think anyone expected to see anything but stellar numbers this quarter.. My point is going into the next 2-3 quarters.

Nothing in any of those numbers out today will reflect what the shorts and myself are thinking.. The royalties is something to consider as you say, but I still believe the growth is going to slow considerably..


I worked in the industry for nearly a decade.. I was very bullish on SNDK all alst year when nobody would touch it and ironically everyone was preaching about what Im preaching now but they were early.. Only they are all blinded by the bull that everyones riding now so they dont want to accept it. PNY technologies is selling a ton of flash memory and its not sandisk.. They can have the royalties... Simple tech.. Kingston.. Viking.. where there are margins? the whores will come and they will destroy..

I could be totally wrong but I see a stock that just lost nearly 1 bill in market cap.. Something tells me I hit the nail right on. Sorry