Replies to post #225710 on Zeev's Turnips Patch-No Politics (ZEEV)

[coach2]

$400 a share was a typo. Any one can fantasize about value. Five times sales is off the wall. There is no depth of management and the former president who died a few years back was very good. What would the p/e be?

[titan3]

posted by:
by: westwoodguy 03/31/04 06:14 pm
Msg: 234045 of 234049

Was QLogic Hurt By Drop In Orders From Sun?
03.31.04, 9:47 AM ET

Merrill Lynch downgraded QLogic to "neutral" from "buy." Merrill said the storage-network technology company's revenue growth has slowed recently and recent execution "has been weaker than expected." The research firm said that QLogic's preannouncement of fourth-quarter projections included revenue and earnings outlooks that were below Merrill's estimates. "The main culprit of the disappointing results was a decline in host bus adapters orders from two of the company's OEMs at the end of the quarter," said Merrill, adding that it suspects that Sun Microsystems "is one of these OEMs."

Merrill said that on the positive side, QLogic should benefit from Sun's "seasonally strong" June quarter and QLogic has an opportunity to win the Hewlett-Packard HP-UX single channel HBA business "within the next year."

[titan3]

http://www.byteandswitch.com/document.asp?doc_id=50336

Not all analyst response was negative. Stephen Chin of UBS Investment Research thinks QLogic's news doesn't mean it's losing market share to Emulex, with which it dominates the HBA market. UBS also thinks QLogic's OEM arrangement with Hitachi Global Storage Technologies (Hitachi GST), which was blamed by analysts for a revenue hit last quarter, is "on track" for next quarter (see OEM Rains on QLogic's Quarter).

UBS also indicates that QLogic could be up for another OEM win with Dell Computer Corp. (Nasdaq: DELL - message board). This seems possible: QLogic has announced its focus on lower-end SANs, and Dell recently indicated it would diverge from its relationship with EMC Corp. (NYSE: EMC - message board) at the low end (see QLogic Stacks SMB Deck and Dell Covers Its NAS).