We had lowered our estimates last week and some softness had been widely expected, however, a new sales range with a mid point of -12.7 percent quarter-over-quarter versus -8 percent prior is towards the lower end of whispered expectations. While valuation (20x new CY06) may offer some support given the absence of guidance on inventory levels, which we believe are likely to have moved materially higher at Intel, and given ongoing uncertainty on the gross margins outlook, we would retain our cautious stance at current levels. |
While Cisco remains our best-positioned vendor, with approximately 15 percent of sales to 'new economy' operators, uncertainty over capital-expenditures spending may continue to suppress its multiple, |
While Cisco remains our best-positioned vendor, with approximately 15 percent of sales to 'new economy' operators, uncertainty over capital-expenditures spending may continue to suppress its multiple. |
While inventory levels rose in the first quarter, investors are likely to be encouraged that management increased its revenue guidance from the low 50s to the 50-60 percent range, with earnings per share guidance increasing by 2-to-5 cents. |