STEC beats, raises

Current quarter beats consensus coming in at 56.2 mil with street at 53.1 mil. EPS beat by a penny, coming in at 9 cents. Gross margins came in above consensus at 35.3% with the street closer to 34.4%. Operating income was 6.7 mil, street was looking for ~5.3 mil. Guidance of 61-63 mil and 10-11 cents, street is at 59.4 mil and 10 cents. Inventory jumped to 78 mil from 39 mil q/q. The company had raised 35 mil to build inventory for anticipated growth and new design wins -- they say in their press release they expect inventory days to trend down over the next several quarters. The company indicates they had a second major enterprise OEM win. They have been qualified at several notebook vendors and expect to begin shipment into that market next quarter.

All in all, a beat on most metrics. One could hope for more leverage but there's a few moving parts in the business. It's unclear from the release how much SSD is contributing to results -- I'll need to hear the call.

Still long.

Lam Research (LRCX) 1Q:2009 results

Lam reports much better than expected for the current quarter, beating top and bottom lines. Stock trades up 3. Guidance is significantly below the street at 425-455 mil with street looking for over 500 mil. Despite the dozen questions they got about it, the company says September is the trough for memory spending and foundry spending. They're even predicting a memory shortage in December.

I was thinking they'd give up the notion of an improving December order quarter and they didn't do that. The stock is interesting in that if they're right they're the only ones that believe the case they're laying out right now. It's hard to envision memory shortages with so much oversupply at present but there have been a lot of recent cutbacks in planned capacity additions and the market is dynamic.

For now, Lam is still 75% memory-related business and near-term that's getting worse not better. I can't tell you to buy it... but I can tell you when the cycle turns to buy this one first.

Atheros (ATHR) 2Q:2008 results

Quarter was slightly better on the top line with a slight gross margin miss. EPS beat consensus by a penny due to a lower tax rate, which averted an EPS miss.

Revenue guidance for next quarter of 13-15% sequential growth equates to 136-139mm, which is slightly better than consensus. Gross margin guidance of 48.5 - 49.5% is well below estimates. Broadcom had a similar dynamic to their quarter -- much bigger revenue blowout with a forecasted decline in gross margins -- the stock is down 20% since. I would expect Atheros to trade lower... in fact, I added to the short at 29 pre-opening.

Though 802.11 is a high growth market, Atheros is highly dependent on 802.11g -- the older flavor. It makes up 63% of revenues. As 802.11n is quickly becoming the mainstream part, 11g pricing will erode quickly. I don't expect their margin situation to change any time soon. The company has talked about adding in new lines of business with large TAMs (total addressable markets) -- this likely means they'll do a large acquisition at some point. Their future is fraught with pricing pressure and integration risk. I don't like it.

Atheros (ATHR) reporting tonight - shorting a little

Marvell and Broadcom were both excessively strong in 802.11 -- which isn't surprising as notebooks are so strong and they're starting to get some handset penetration with the technology. I wonder, though, if Atheros couldn't be seeing some competitive pressure -- if that strength at Marvell and Broadcom isn't a bad omen. Both MRVL and BRCM have come in pretty good since reporting.

The chart seems very iffy to me. I see resistance at 31.5 and a lot of lines below.

This trade is risk/reward. I think I might lose 80 cents and I could make $10. So I'm going to try it. I have nothing special.

NAND memory is a mess here

There's still a lot of capex cuts flowing through the industry here. I've been saying notions of Q4 recovery for memory capex were going to fade as NAND took another big dip in pricing and demand... and it's happening now. Sandisk said they'd cut capex quite a bit and pushed out some expansion plans. Hynix said they'd shutter some US capacity and maybe look to sell the unit. Samsung's memory comments last night were pretty bleak. Samsung is the port in the storm for the industry -- they've been spending aggressively through the downturn -- expect that to change as reality sets in.

Lam is going to have to throw in the towel on a December recovery. After that, I don't know yet. Possibly all these memory capacity cuts will set the stage for a good second half of 2009. That's a ways out. For now I suggest letting the bad news flow.

Varian Semiconductor (VSEA) 3Q:2008 results

Varian is a semicap with a lot of memory exposure. As the memory market has been under extreme pressure for most of the year I've been saying sell VSEA, LRCX, MTSN, FORM, KLAC... they're all much more memory dependent than the historical norms. It's been biting most of them in the ass. Varian is no exception.

The current quarter was fine. The outlook was dismal. They guided to revenues of 130-140mm with the street at 176mm and earnings of break even with the street looking for 24 cents. The stock charts to roughly 23.1 where I'll look to cover.

Western Digital (WDC) 4Q:2008 results

Western Digital (WDC) reported better than expected numbers for the quarter but guided gross margins to 19.3% for next quarter -- the street was assuming over 21% on slightly better revenue. The net of it is an EPS outlook a dime below the street.

Though channel inventory was worked down across the industry, OEM pricing came through worse as a result of the availability of drives while negotiating was in process.

I'd suggested shorting this stock in the mid and high 30s. I wouldn't really be a buyer until its under 25.

Earnings Estimate Cheat Sheet: July 23, 2008 - July 24, 2008

Estimated Reporting Date	Symbol	Revenue Estimate Current Q	Operating Profit Estimate Current Q	EPS Estimate Current Q	EBITDA Estimate Current Q	Revenue Estimate Next Q	Sequential Revenue Growth Estimate, Percent	Operating Profit Estimate Next Q	EPS Estimate Next Q	EBITDA Estimate Next Q	Revenue Estimate Full Year	Operating Profit Estimate Full Year	EPS Estimate Full Year	EBITDA Estimate Full Year	Revenue Estimate Next Year	Operating Profit Estimate Next Year	EPS Estimate Next Year	EBITDA Estimate Next Year
7/23/2008	AEIS	83.4	5.1	0.10	8.1	85.3	2.35%	8.4	0.14	11.7	343.8	32.1	0.54	43.7	381.8	49.4	0.86	62.7
7/23/2008	AMZN	3,955.4	157.8	0.26	286.0	4,231.3	6.98%	171.4	0.28	295.7	19,599.7	881.6	1.50	1,348.2	24,318.5	1,223.6	2.10	1,754.3
7/23/2008	ARW	4,038.0	161.0	0.77	181.5	4,141.1	2.55%	153.6	0.72	174.0	16,504.9	666.7	3.15	730.1	17,232.3	717.7	3.42	788.4
7/23/2008	ATMI	92.3	14.3	0.32	21.2	99.5	7.82%	16.2	0.34	24.5	388.3	63.8	1.36	90.6	433.3	75.3	1.56	96.2
7/23/2008	BIDU	112.5	34.9	0.97	47.2	135.3	20.20%	42.7	1.22	57.2	470.7	149.1	4.15	195.1	748.6	245.5	6.61	312.1
7/23/2008	CDNS	316.2	43.0	0.14	64.6	412.8	30.56%	137.1	0.40	158.7	1,511.6	390.4	1.16	482.5	1,582.6	410.8	1.32	562.2
7/23/2008	CTXS	387.0	81.5	0.36	88.4	403.2	4.19%	90.1	0.39	92.7	1,620.3	357.5	1.59	431.5	1,890.0	455.4	1.95	526.5
7/23/2008	DGII	46.5	0.9	0.04	3.3	49.4	6.22%	3.5	0.09	6.2	183.5	13.1	0.40	22.5	215.7	18.2	0.52	28.1
7/23/2008	EQIX	170.0	16.7	0.14	66.7	178.5	5.00%	19.3	0.18	70.8	696.2	73.7	0.74	279.1	860.2	138.5	1.99	362.9
7/23/2008	FFIV	161.4	23.7	0.22	46.6	169.1	4.78%	26.9	0.24	50.0	643.7	96.9	0.87	186.7	749.3	130.8	1.12	233.4
7/23/2008	GSIC	181.6	(19.9)	(0.26)	(1.0)	188.1	3.61%	(17.1)	(0.23)	2.4	1,000.8	(1.6)	0.01	73.9	1,176.6	16.0	0.20	97.1
7/23/2008	IKAN	30.1	(0.3)	0.01	--	31.7	5.40%	(0.5)	0.00	--	124.9	(1.1)	0.03	--	145.4	1.3	0.10	--
7/23/2008	ISIL	217.0	60.2	0.38	61.5	220.6	1.68%	63.8	0.40	66.6	871.9	249.1	1.59	249.6	945.5	280.5	1.80	289.5
7/23/2008	JAKK	136.8	8.8	0.22	16.1	339.9	148.41%	72.0	1.50	77.3	906.1	119.9	2.91	146.6	939.1	130.4	3.09	154.3
7/23/2008	LSI	665.5	66.5	0.09	--	693.4	4.19%	77.8	0.11	--	2,752.8	303.2	0.43	370.1	2,910.4	352.5	0.48	413.5
7/23/2008	MTSN	39.7	(9.8)	(0.15)	(12.0)	40.0	0.65%	(9.0)	(0.17)	(13.0)	173.7	(28.6)	(0.45)	(27.0)	227.0	3.3	0.16	9.5
7/23/2008	MLNX	27.8	7.0	0.22	--	30.2	8.73%	9.1	0.28	--	115.7	31.7	1.01	29.6	147.6	42.9	1.31	43.0
7/23/2008	NTGR	196.0	18.5	0.35	--	213.9	9.10%	21.8	0.41	--	834.4	82.7	1.59	86.0	960.6	100.5	1.87	106.0
7/23/2008	QCOM	2,708.8	1,039.5	0.55	1,077.8	2,712.8	0.15%	1,028.7	0.54	1,054.4	10,466.0	4,033.3	2.15	4,382.8	11,888.0	4,784.7	2.46	5,297.8
7/23/2008	QUIK	8.5	(2.2)	(0.07)	--	9.0	5.88%	(1.0)	(0.04)	--	39.2	(3.5)	(0.12)	--	42.0	0.6	0.01	--
7/23/2008	SANM	1,823.5	52.6	0.04	81.2	1,867.9	2.44%	55.8	0.05	85.1	7,967.5	214.3	0.15	321.7	7,741.3	239.7	0.23	355.7
7/23/2008	SKX	360.3	22.4	0.34	29.0	447.2	24.12%	45.9	0.66	52.5	1,532.5	140.0	2.04	161.2	1,704.0	162.0	2.32	185.1
7/23/2008	STMP	21.0	1.7	0.11	1.9	21.2	1.02%	2.8	0.17	3.1	87.0	9.3	0.63	10.6	96.2	10.5	0.69	12.7
7/23/2008	SY	262.5	53.1	0.43	76.7	269.3	2.59%	58.9	0.48	83.2	1,097.2	243.9	1.97	341.7	1,165.4	273.9	2.18	366.4
7/23/2008	TER	321.0	30.7	0.17	49.0	332.6	3.61%	42.4	0.21	59.0	1,298.9	143.3	0.74	221.3	1,412.6	198.5	0.99	269.0
7/23/2008	TQNT	127.7	8.3	0.07	17.3	146.7	14.81%	15.9	0.11	24.8	547.3	52.3	0.38	87.3	624.7	81.6	0.51	117.2
7/23/2008	UIS	1,329.9	37.0	0.03	--	1,378.5	3.66%	58.0	0.05	--	5,511.7	223.6	0.16	583.1	5,450.5	279.8	0.33	638.5
7/23/2008	TZOO	21.0	1.1	(0.02)	1.4	21.3	1.35%	1.3	(0.01)	1.8	83.9	4.5	(0.10)	6.5	90.1	11.7	0.31	12.3
7/23/2008	WFR	557.9	263.3	1.00	290.1	616.3	10.47%	295.3	1.14	317.9	2,361.0	1,107.1	4.30	1,208.7	2,953.1	1,404.8	5.24	1,524.9
7/23/2008	XLNX	483.8	126.8	0.37	151.5	496.5	2.62%	132.7	0.39	156.2	1,977.3	527.3	1.53	607.4	2,127.6	588.3	1.74	690.3
7/24/2008	ARTG	39.3	1.2	0.01	3.4	40.8	3.94%	2.1	0.02	4.1	161.6	9.5	0.09	--	193.0	21.5	0.17	29.2
7/24/2008	AUO	4,066.0	534.6	0.57	--	4,024.0	-1.03%	505.4	0.53	--	16,830.8	2,571.8	2.83	5,523.9	17,722.0	2,358.3	2.09	5,658.3
7/24/2008	AVID	211.0	(6.5)	(0.10)	(0.2)	219.8	4.17%	2.8	0.08	12.7	881.7	2.9	0.12	32.8	933.7	28.3	0.70	59.2
7/24/2008	BMC	432.5	106.0	0.43	109.1	469.5	8.54%	131.6	0.51	130.3	1,933.4	553.9	2.15	629.8	2,070.6	606.3	2.45	705.0
7/24/2008	BKHM	61.5	(4.2)	(0.04)	(0.8)	65.2	5.90%	(2.0)	(0.02)	0.5	234.4	(21.0)	(0.18)	(2.0)	269.9	0.5	0.00	19.0
7/24/2008	CCMP	97.6	11.3	0.39	16.0	99.5	1.93%	14.1	0.44	19.0	385.0	50.5	1.68	74.5	427.2	65.5	2.10	89.0
7/24/2008	CHRT	455.5	8.0	0.03	--	474.4	4.16%	12.0	0.06	--	1,822.2	10.3	0.17	599.4	1,987.9	121.3	0.39	755.7
7/24/2008	COHU	50.0	(2.1)	(0.01)	--	56.5	13.00%	1.6	0.06	--	220.4	2.7	0.22	--	261.0	27.7	0.81	--
7/24/2008	CYMI	123.4	15.7	0.39	22.0	118.5	-4.00%	12.8	0.34	18.0	491.2	64.5	1.56	91.7	536.3	85.6	2.04	105.4
7/25/2008	ENWV	--	--	--	--	--	#VALUE!	--	--	--	--	--	--	--	--	--	--	--
7/24/2008	EPIC	132.2	22.0	0.21	22.3	139.9	5.85%	25.8	0.26	27.2	536.2	89.6	0.90	93.3	582.3	109.4	1.10	112.1
7/24/2008	ESIO	61.7	0.1	0.03	1.6	60.0	-2.76%	0.2	0.04	0.7	256.1	5.8	0.27	13.6	281.0	18.9	0.60	26.1
7/24/2008	FALC	23.5	5.1	0.07	--	25.0	6.25%	5.7	0.08	--	103.1	25.2	0.34	--	131.2	34.2	0.47	--
7/24/2008	FLEX	8,297.2	285.0	0.28	402.3	8,916.0	7.46%	317.9	0.31	435.2	35,590.9	1,282.1	1.25	1,766.6	39,388.4	1,512.7	1.47	2,010.3
7/24/2008	IM	8,582.4	97.4	0.35	114.6	8,785.0	2.36%	108.1	0.40	121.8	35,891.0	470.0	1.72	545.4	37,884.6	534.5	1.96	598.9
7/24/2008	ISSI	59.8	0.5	0.08	--	62.7	4.73%	1.2	0.08	--	244.0	3.1	0.30	--	263.9	6.2	0.35	--
7/24/2008	IWOV	62.5	10.7	0.17	--	63.2	1.26%	11.0	0.17	--	257.1	44.8	0.71	--	286.1	53.8	0.82	--
7/24/2008	JNPR	852.2	198.1	0.27	249.2	888.4	4.25%	211.2	0.29	261.5	3,500.1	835.4	1.13	1,009.0	4,122.4	1,053.2	1.39	1,219.8
7/24/2008	KMT	732.4	92.5	0.84	114.7	655.4	-10.52%	67.2	0.61	90.7	2,684.7	304.7	2.75	394.9	2,830.6	340.4	3.10	430.4
7/24/2008	LDIS	7.3	(8.4)	(0.26)	(8.1)	11.6	58.93%	(7.3)	(0.22)	(7.0)	42.0	(29.7)	(0.92)	(28.5)	82.2	(6.9)	(0.20)	(5.7)
7/24/2008	LSCC	58.1	(0.5)	0.02	--	60.3	3.66%	(0.4)	0.03	--	236.3	(0.1)	0.08	13.9	262.9	13.7	0.18	29.7
7/24/2008	LVLT	1,075.0	(31.3)	(0.10)	220.2	1,080.0	0.46%	(6.0)	(0.09)	241.0	4,349.0	(112.8)	(0.39)	913.1	4,599.0	83.9	(0.26)	1,109.2
7/24/2008	MCHP	270.3	89.0	0.40	111.4	278.3	2.97%	93.7	0.41	115.2	1,116.1	373.5	1.66	462.8	1,229.2	420.7	1.90	524.9
7/24/2008	MCRL	68.9	11.3	0.11	--	70.7	2.51%	13.0	0.12	--	278.4	48.7	0.48	66.2	303.8	61.8	0.59	76.2
7/24/2008	MSCC	128.8	35.2	0.34	42.0	133.2	3.39%	37.3	0.35	44.7	512.1	137.8	1.32	165.9	579.1	170.3	1.61	200.4
7/24/2008	NEM	1,461.4	521.0	0.47	476.7	1,566.3	7.17%	614.0	0.58	572.0	6,725.6	2,617.3	2.39	3,040.8	7,412.0	3,276.6	2.93	3,503.1
7/24/2008	NETL	36.2	8.1	0.37	--	37.6	3.73%	8.3	0.37	--	147.2	33.0	1.51	--	175.7	42.5	1.77	--
7/24/2008	NTCT	63.7	7.4	0.11	--	64.9	1.88%	8.3	0.13	--	265.9	33.8	0.54	--	293.9	45.0	0.73	--
7/24/2008	PLXS	441.2	20.1	0.39	27.9	461.6	4.63%	22.3	0.43	30.5	1,812.4	101.6	1.88	131.2	2,005.6	104.3	2.01	136.4
7/24/2008	POWI	54.7	12.1	0.35	14.1	61.4	12.09%	14.8	0.42	16.9	230.1	53.6	1.53	61.4	267.1	67.7	1.86	75.2
7/24/2008	PTIX	10.8	(0.4)	0.01	--	11.6	7.12%	(0.0)	0.03	--	45.4	0.4	0.15	--	51.1	2.6	0.30	--
7/24/2008	QI	660.1	(479.5)	(1.47)	(367.0)	762.5	15.51%	(398.5)	(1.18)	(250.4)	2,843.8	(2,423.1)	(7.72)	(1,494.7)	3,549.3	(741.7)	(2.62)	437.2
7/24/2008	RMBS	34.3	(24.0)	(0.12)	--	31.4	-8.46%	(25.0)	(0.12)	--	154.6	(99.9)	(0.48)	--	154.8	(87.3)	(0.38)	--
7/24/2008	RMTR	15.3	2.1	0.05	--	16.7	9.37%	1.5	0.06	--	63.7	7.1	0.23	--	80.8	11.7	0.34	--
7/24/2008	RSH	908.5	62.2	0.26	89.0	933.8	2.78%	71.1	0.31	94.5	4,117.4	356.3	1.58	448.9	4,052.3	355.5	1.56	432.0
7/24/2008	RVBD	77.0	11.0	0.11	13.1	81.9	6.42%	12.6	0.13	14.6	321.8	48.8	0.49	58.9	404.2	79.0	0.75	93.3
7/24/2008	SIMG	67.6	3.0	0.04	5.2	75.2	11.37%	6.1	0.07	10.2	283.3	17.4	0.22	29.8	297.7	21.1	0.27	36.5
7/24/2008	SIRF	62.1	(10.1)	(0.13)	--	69.9	12.66%	(0.9)	(0.00)	--	270.1	(16.7)	(0.19)	--	294.1	4.6	0.24	--
7/24/2008	SYNT	102.5	17.6	0.38	21.6	107.4	4.81%	20.3	0.43	23.6	420.9	78.4	1.76	91.9	509.8	96.8	1.99	111.9
7/24/2008	TASR	27.2	0.9	0.01	3.8	31.0	14.16%	4.7	0.05	6.4	115.2	15.8	0.14	18.0	141.4	35.2	0.32	34.9
7/24/2008	TRMB	377.5	82.5	0.45	92.1	338.1	-10.45%	65.5	0.36	72.2	1,419.0	282.2	1.54	318.1	1,605.5	333.8	1.82	359.1
7/24/2008	TXN	3,440.1	857.5	0.45	1,101.0	3,429.2	-0.32%	849.2	0.45	1,120.8	13,507.9	3,345.6	1.83	4,319.7	14,093.7	3,624.7	1.97	4,681.6
7/24/2008	UTEK	32.0	1.6	0.10	3.5	32.2	0.55%	1.6	0.10	3.5	130.2	6.7	0.44	14.6	148.7	13.1	0.69	20.8
7/24/2008	VIGN	46.5	1.0	0.10	5.0	46.4	-0.14%	1.0	0.09	4.0	189.3	7.0	0.49	12.0	206.3	15.4	0.81	--
7/24/2008	VLCM	69.5	5.9	0.17	7.2	112.4	61.75%	25.7	0.69	27.4	346.8	58.5	1.58	64.9	397.8	68.9	1.86	73.7
7/24/2008	VLTR	29.9	6.1	0.25	6.8	31.0	3.44%	6.3	0.25	6.9	112.6	21.5	0.88	23.9	132.0	27.7	0.96	28.5
7/24/2008	VSEA	181.2	27.7	0.25	31.6	183.3	1.16%	29.7	0.27	30.6	873.8	178.9	1.54	194.3	916.2	204.8	2.07	232.9
7/24/2008	WDC	1,887.7	199.5	0.82	305.4	2,035.8	7.85%	241.0	0.99	354.8	7,966.1	1,016.4	4.19	1,414.7	8,417.8	1,012.1	4.12	1,467.4
7/24/2008	ZBRA	253.9	42.5	0.45	51.3	255.8	0.72%	43.9	0.47	52.2	1,023.9	177.0	1.87	208.9	1,104.5	199.9	2.15	232.4
7/25/2008	ENWV	--	--	--	--	--	#VALUE!	--	--	--	--	--	--	--	--	--	--	--
7/25/2008	NFLX	337.6	32.1	0.40	41.8	347.2	2.84%	29.6	0.31	38.3	1,374.0	108.2	1.23	139.6	1,624.8	151.6	1.54	216.5
7/25/2008	RNOW	34.3	(2.6)	(0.05)	(0.8)	35.5	3.59%	(1.0)	(0.00)	1.0	139.8	(6.7)	(0.10)	1.9	167.7	5.2	0.23	14.2