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Richard Davenport's  Instablog

Richard Davenport is the founder of Connexiti LLC (http://www.connexiti.com), the leading provider of supply chain research, data, and analytics. Prior to founding Connexiti, Richard was a research analyst for Citigroup in New York, where he formalized supply chain analysis as a discipline and... More
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Connexiti LLC
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connexiti.com
  • Supply Chain Insights : Expect Modest Upside For CSCO

    CSCO : SEE MODEST UPSIDE TOMORROW. CSCO reports FQ4 results tomorrow (8.5.09) after the close. The Street expects FQ4 revs of $8.519B, +0.9% above the midpoint of mgmt’s guidance of $8.447B. Street FQ4 revs assume +4.4% Q/Q growth (7-yr avg +5.0%; s=3.02). Street FQ1 revs are $8.589B (+0.8% Q/Q; 8-yr avg of +2.0%; s=2.95). Thus Street expectations are modestly below historical norms, and we see modest upside given supply chain data that suggest early stages of economic recovery. We are Long CSCO (7.10.09) stemming from Hon Hai’s record Jun results and a stabilizing in enterprise IT spending.

     
    COMPETITORS: STABILIZING. Competitor data for CSCO is best characterized as stabilizing, with the highest guidance relative to the Street +2.1% above expectations (FFIV), and the worst down -6.8% (ARRS)—or else no guidance at all due to a still-cautious outlook.
    More »
    Tags: EXTR, ARRS, MOT, SONS, CHKP, ERIC, RVBD, JNPR, CSCO, FFIV, CTXS, NTGR, FNSR, NETL, FLEX, STM, CAVM, IDTI, BRCM, PMCS, TUNE, CLS, SANM, JBL, Networking
    Aug 04 08:40 pm | Link | Comment!
  • INTC: Much Higher Results And Guidance, As Expected; Many Beneficiaries
    • Q2 revs $8.024B (+10.2% above Street $7.284B)
    • Q3 rev guidance $8.5B (+8.8% above Street $7.813B)
    • GM 51% (vs mgmt guidance mid-40s)
    • Q2 Q/Q rev growth highest since 1988--over 20 years!
    • Supports our long position on INTC, PC supply chain (4.9.09); also CCMP, WFR, distis
    • Multiple positive beneficiaries, including AMD, NVDA, MU, MRVL, WFR, many others

    INTC reported Q2 revs of $8.024B, +10.2% above Street expectations of $7.284B. The Q2 Q/Q rev growth of +12.3% is the highest in over 20 years (since 1988). GM of 51% was above mgmt guidance of mid-40s. Inventories of $2.805B declined -7.9% Q/Q. Mgmt guided Q3 revs of $8.5B +/- $400M, +8.8% above Street expectations of $7.813B.

    We expected INTC to beat and guide higher, having published on the name 38 times since we went long INTC and several other PC supply chain names in April (see SMSC: Positive PC Supply Chain Indicator, 4.9.09). Recently, we have seen numerous positive PC supply chain data, especially from Taiwan (see Taking Stock: Initial June Taiwan Data Very Positive, Well Above Seasonal Norms, 7.9.09).

    Yesterday, DELL guided revs that were only in line with Street expectations. As we wrote yesterday, we did not think that was a negative harbinger for INTC, and in fact suggested good things for comp HPQ. INTC's report confirms that.

    We view INTC's very strong results and guidance as supporting our Long position on PC supply chain names AAPL, AMD, ATHR, AUTH, CY, DELL, HPQ, IDTI, LSI, LXK, MRVL, MU, NVDA, PMCS, SMSC, STX, SYNA, and WDC; raw materials suppliers CCMP and WFR; LCD supply chain names GLW and HIMX; and distributors ARW and AVT.

    Tags: AAPL, AMD, ATHR, AUTH, CY, DELL, HPQ, IDTI, LSI, LXK, MRVL, MU, NVDA, PMCS, SMSC, STX, SYNA, WDC, CCMP, WFR, GLW, HIMX, ARW, AVT, PCs
    Jul 14 09:48 pm | Link | Comment!
  • Taking Stock: Initial June Taiwan Data Very Positive, Well Above Seasonal Norms

    EVENT Leading Taiwanese Tech Companies All Reporting June Results Well Above Seasonal Norms

    CAUSE

    More »
    Tags: AMD, ATHR, AUTH, DELL, HPQ, IDTI, INTC, LSI, LXK, MRVL, MU, NVDA, STX, SYNA, WDC, HIMX, GLW, Taiwan, PCs, LCDs
    Jul 09 11:43 am | Link | Comment!
  • ERIC : China 3G Contracts Support Thesis

    EVENT $1B Contract With CHL; $700M Contract With CHU

    CAUSE

    More »
    Tags: ERIC, ADI, ALTR, ALU, COGO, CTV, PMCS, PWAV, SMI, TQNT, TXN, XLNX, China 3G
    Jul 09 11:38 am | Link | Comment!
  • Acer : Huge June; Positive PC Data Point

    EVENT Jun Revs NT$44.187B (US$1.339B); +27.2% M/M, Well Above 6-Yr Avg of +16.5%

    CAUSE

    More »
    Tags: AMD, ATHR, AUTH, DELL, HPQ, IDTI, INTC, LSI, LXK, MRVL, MU, NVDA, STX, SYNA, WDC, PCs, Taiwan
    Jul 08 10:19 pm | Link | Comment!
  • Quanta: Monster June Positive For PC Supply Chain
    • Jun revs NT$61.938B (US$1.886B)
    • +34.1% M/M, well above 7-yr seasonal avg of +13.8%
    • Implies Q2 revs of NT$159.961B (US$4.871B)
    • +7.0% Q/Q, above 7-yr seasonal avg of +5.0% Q/Q
    • Consistent with other positive PC supply chain data
    • Supports our long position on numerous PC supply chain names

    Earlier today Quanta Computer, the world's largest notebook ODM, reported Jun revs of NT$61.938B (US$1.886B). The M/M growth of +34.1% is well above a 7-yr avg of +13.8%. The strong Jun numbers implies Q2 revs of NT$159.961B (US$4.871b). The Q/Q growth of +7.0% is above a 7-yr avg of +5.0% Q/Q.

    Quanta's May results were below seasonal norms, due to component shortages (see our comment from 6.10.09), as were April's. But given the very strong Jun numbers, those component shortages (LCD panels and optical pick-up heads) seem to be resolved.

    Taiwan data thus far for June is looking very strong. We view Quanta's positive June and Q2 results as the latest in a long line of positive PC supply chain data points going back to early April (see SMSC: Positive PC Supply Chain Indicator, 4.9.09). Earlier today, we published a note on Acer's very strong Jun results.We reiterate our long position on AMD, ATHR, AUTH, DELL, HPQ, IDTI, INTC, LSI, LXK, MRVL, MU, NVDA, SMSC, STX, SYNA, and WDC.

    Tags: AMD, ATHR, AUTH, DELL, HPQ, IDTI, INTC, LSI, LXK, MRVL, MU, NVDA, SMSC, STX, SYNA, WDC, Taiwan, PCs
    Jul 08 10:11 pm | Link | Comment!
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