MU | OUR DATA…
Our data indicates DRAM pricing may be up h-s-d% q/q in 1Q17. Inventories are low, demand is strong, and the technology manufacturing process continues to get increasingly more difficult. If this is an accurate read, it would provide yet another estimate upgrade for Micron, this time for the Feb-Q (F2Q18).
SABR | Reports Tuesday | What Are We Missing?
We always worry going into earnings. Our data tracker has been pretty accurate in terms of directionally predicting results, and this Q it indicates a miss on Sep-Q (topline) and a wider miss on the Dec-Q.
In the last two quarters, our tracker predicted Sabre’s Travel Network revenue to within less than 1% of reported actual results.
We are -2% on 3Q topline for Sabre. We are more than 4% below on 4Q revenue. How come? The central problem is seasonality: the Street doesn’t seem to be modeling traditional 4Q seasonality.
But when the data is so self-evident, we have to wonder: what are we missing?
For more details, see our full Sabre note (HERE)
MSCC | What is going on
Microsemi told everyone (below) that they would show organic quarters in 2H17 (CY)…then they squeezed in Phonon late into the June-Q, and now they are adding Vectron International which may close before the end of the Dec-Q (according to Knowles).
So - what gives!?! What are they hiding?
Our data on the pace of orders in the military/defense supply chain also doesn't bode that well, as our recent discussions highlighted demand improved y/y but not to the level previously expected.
September is a good look at our organic performance as well. We guided the street to, at the midpoint, $475 million for the September quarter. They'd be up a little over 5% year-over-year. We've got gross margins in the range -- I talked about gross margins are guided between 63% and 64.2%. It should drive, at the midpoint, somewhere around $1.08 on the bottom line. Good consistent growth off of this -- off the prior quarter's EPS numbers you'll see here. (10/3/17, IR)
We don't need to buy just to buy. We're showing organic growth this quarter, so we don't have to get back in the market for a big acquisition any time soon. But that will happen too in time, so I would expect some activity from the buyback. In terms of how much goes to cash versus debt pay-down every quarter, we're going to figure it out mathematically and we'll go from there. (8/9/17 IR)
