PS2 Chip Developer Hanging In There
LSI Logic Corp is still very confident in the Playstation2, even after a much smaller shipment is expected.
Published: September 28, 2000
Specialty semiconductor maker LSI Logic Corp. said it still expects to meet third-quarter revenue targets despite the warning from Sony Corp., a top client, that Sony had scaled back its much-anticipated launch of the Playstation2 game console.
Milpitas, California-based LSI said that its outlook already reflects modifications for Sony's diminished roll-out. LSI's stock was up $1-11/16, or more than 5 percent, to $30-1/4 in Thursday afternoon New York Stock exchange trading. Its 52-week range is between $21-9/16 and $90-1/4.
Sony said on Wednesday that parts shortages would cause a halving in the initial roll-out of its long-awaited Playstation2 video game console on its North American shipping date of October 26. Though the Japanese company said it could meet a global sales target of 10 million consoles by March, the October scale-back sparked concerns about Sony's ability to meet U.S. holiday demand.
The new console is one of the key drivers for LSI's future revenue growth, and the delay in production could have a slight impact on LSI's third-quarter results, said Credit Suisse First Boston analyst Tim Mahon.
But LSI said on Thursday it remains comfortable with its previous guidance of 10 to 12 percent sequential revenue growth for the third quarter. In the second quarter it reported $644.3 million in revenue, which would indicate an expected third-quarter revenue range of about $708 million to $721 million. LSI reported revenue of $540 million in the third quarter 1999.
Analysts on average have estimated the company would report third-quarter earnings per share of 32 cents, according to research firm First Call/Thomson Financial. It earned 18 cents per share a year earlier.[blockquote]"People are getting extremely nervous over something not very far off the original schedule," Gerard Klauer Mattison analyst Jack Geraghty said. Sony is not even disclosing which parts are in short supply, he said.[/blockquote]LSI said it is continuing to fulfill all of its requirements for the Playstation2, and is "capable of responding to the accelerated Playstation2 shipment ramp described by Sony in their news release yesterday," LSI Logic Chairman and Chief Executive Wilf Corrigan said in a statement.
Although Sony makes up 10 percent of LSI's revenue, "it doesn't go into PlayStation 2 because the product hasn't shipped. Ten percent goes into every other thing, including Playstation 1," said Geraghty.
LSI was not the only company on Thursday to reassure the investment community that the Playstation2 issue would not harm their outlooks, as THQ recently did the same.
Milpitas, California-based LSI said that its outlook already reflects modifications for Sony's diminished roll-out. LSI's stock was up $1-11/16, or more than 5 percent, to $30-1/4 in Thursday afternoon New York Stock exchange trading. Its 52-week range is between $21-9/16 and $90-1/4.
Sony said on Wednesday that parts shortages would cause a halving in the initial roll-out of its long-awaited Playstation2 video game console on its North American shipping date of October 26. Though the Japanese company said it could meet a global sales target of 10 million consoles by March, the October scale-back sparked concerns about Sony's ability to meet U.S. holiday demand.
The new console is one of the key drivers for LSI's future revenue growth, and the delay in production could have a slight impact on LSI's third-quarter results, said Credit Suisse First Boston analyst Tim Mahon.
But LSI said on Thursday it remains comfortable with its previous guidance of 10 to 12 percent sequential revenue growth for the third quarter. In the second quarter it reported $644.3 million in revenue, which would indicate an expected third-quarter revenue range of about $708 million to $721 million. LSI reported revenue of $540 million in the third quarter 1999.
Analysts on average have estimated the company would report third-quarter earnings per share of 32 cents, according to research firm First Call/Thomson Financial. It earned 18 cents per share a year earlier.[blockquote]"People are getting extremely nervous over something not very far off the original schedule," Gerard Klauer Mattison analyst Jack Geraghty said. Sony is not even disclosing which parts are in short supply, he said.[/blockquote]LSI said it is continuing to fulfill all of its requirements for the Playstation2, and is "capable of responding to the accelerated Playstation2 shipment ramp described by Sony in their news release yesterday," LSI Logic Chairman and Chief Executive Wilf Corrigan said in a statement.
Although Sony makes up 10 percent of LSI's revenue, "it doesn't go into PlayStation 2 because the product hasn't shipped. Ten percent goes into every other thing, including Playstation 1," said Geraghty.
LSI was not the only company on Thursday to reassure the investment community that the Playstation2 issue would not harm their outlooks, as THQ recently did the same.
