The results are in and the winner is … clgl which is experienced in trading and bought options for protection. I am a fundamentalist … old fashion, so I sold on the rally.
** Revenues 957 (me 955)
** Gross margin 375 (me 375, sorry for being 0% wrong)
** SG&A 110 (me 105, I thought less sales, less expenses, but I was wrong)
** R&D 186 (me 188, I did not thing the downsizing was in any effect in Q4, it should be in Q1)
** Operating earnings 56 out of which 20 are restructuring and 3 useless amortization, so actual earnings without one-off items 79 (me 82 without excluding 10 restructuring and ignoring amortization, so, sorry about my mistake, it is 79, not 82).
** Other expense (debt servicing) 127 (me 135, that is my mistake, I will check if numbers from the interest are right).
** Net income -35 (me -53, sorry, how could I have predicted FSL will benefit from a -37 tax credit instead of expense; so in real terms the quarter ended -72; anyway I spin it, I was wrong by about 15)
The question is, what will market do? Did anyone see VMWare today? -21%. I am simply curios to see.
ur mouth to Gods ears. Bought PUTS to cover some of my position if it tanks, sold OTM calls against ITM positions (except one, gonna keep 500 shares going through maybe), so hopefully it'll take a jolt and I'll make money both ways. Meanwhile, it's still a fairly reasonable long term position.
It's just alittle pricey right now.
My view on the upcoming earning report.
______ 4Q12 3Q12
Revenues 955 1009
Gross margin 375 424
SG&A 105 110
R&D 188 187
Operating earnings 82 130
Other expense -135 -134
Q net income -53 -4
I expect severance packages in total of more than 10 mil USD in Q4, lowering further the quarterly net income to -63 mil USD. What investors don’t remember is that FSL took a fortune from the insurance premium after the tsunami hit its Japan factories, 60-70 mil USD in 2011Q4 alone for a shutdown factory (and continued in the next quarter). That base effect combined with lower sales because of the economy will be a drag for this quarter. The already large inventory at the industry level for 2013Q1 combined with the tsunami positive effect specific to FSL will be another headwind.
Keep this in mind and let the knife fall and buy again when the price is much lower.
It depends on the market.
Search a report on the net, I cannot paste the link here.
"“The magnetic sensor market consists of Hall-effect and magneto-resistive semiconductor ICs that are used to track rotational speed and linear angles in machines and devices, or to detect and process magnetic fields to establish positioning,” said Richard Dixon, principal analyst for MEMS & sensors at IHS.
“The sensors are utilised in a wide range of applications - from electronic systems and motors in cars, to compasses in cellphones and tablets, to the monitoring of current in solar inverters, to brushless direct-current (DC) motors in a range of medical systems such as ventilators, dialysis machines and centrifuges,” he notes.
The largest portion of the magnetic sensor market in 2011 was in the automotive segment, with revenue reaching $731.3 million, up 13 percent from $648.9 million in 2010. Growth was more robust in the joint wireless-consumer space, increasing by a staggering 50 percent to $549.9 million in 2011, up from $347.7 million in 2010.
The industrial-military-energy-medical sector generated $153.3 million, up 6 percent from $145.3 million in 2010. Also, the data processing segment went up 2.5 percent from $63.0 million to $64.6 million in 2011.
Another further 13 percent climb is predicted for 2012 when sensor revenue hits $1.7 billion. By 2016, revenue will amount to some $2.3 billion, equivalent to a five-year compound annual growth rate by then of 9.3 percent.
The market drivers for magnetic sensors can be classified into various categories. These include safety applications for the sensors include airbags in vehicles and fault detection in solar panels. Magnetic sensors can also be found to aid new functionality, comfort or intelligence, utilised in automotive seat-position memory, improved heading resolution for navigation systems in cars and cellphones, and quieter motors in medical equipment. Energy efficiency is similarly a major market driver of the sensors, found in intelligent fans in cars, as well as in higher-efficiency motors for industrial manufacturing and automation.
In the automotive segment sensors are used in multiple functions. For example, the sensors figure in the reduction of power consumption, especially as manufacturers face increasing pressure to reduce carbon emissions by fractions of a gram of carbon dioxide or other unwanted pollutants. One area of focus here is motors, which migrate from “always on” pulley systems with the associated friction, to electronic equivalents that can be controlled on demand. These motors at the same time migrate to more efficient and reliable brushed DC varieties that use multiple Hall sensors for their control or commutation.
Other implementations of magnetic sensors in cars include basic wheel-speed sensing for anti-lock braking systems (ABS), torque sensing in steering systems, electronic throttle-by-wire systems and multiple applications in car-battery monitoring.
Magnetic sensors are also big in multiple-axis-measurement electronic compasses, now found as a standard feature in cellphones and tablets equipped with global positioning systems (GPS).
Consumer electronics applications such as gaming consoles, laptops and geotagging-equipped digital still cameras will also benefit from the sensors.
Magnetic sensors also find major use in the measurement of currents and motion-control positioning, particularly in the burgeoning industrial motor space as well as for motor drives and solar inverter markets.
Other implementations for magnetic sensors include their use in data processing and peripherals, such as fax machines and printers; in consumer electronics, such as in white goods like coffee machines for water-level detection; and in various military, agricultural and transport applications."
This market has about 1.6 bil USD in 2012. The top suppliers of magnetic sensors last year were Asahi Micro Devices from Japan, Allegro MicroSystems of Massachusetts, part of Sanken Electric; Infineon Technologies AG of Germany, Micronas of Switzerland, Melexis NV of Belgium, and NXP Semiconductors of the Netherlands. Together these six suppliers accounted for 80 percent of the magnetic sensor IC market in 2011.
I can't say as I've ever read a comparison report on batches of similar sensors from those makers. Frankly as long as its well within engineering specifications and there are few bad components I think they're fairly equivalent given the ratings.
Now, the question is, who can produce the fastest and most sensitive but noise filtered sensors at the cheapest price, and supply them quickly to local manufacturers?
I primarily got into FSL because of their prototyping systems and ability to subsequently make small to HUGE lots of custom cut product at a reasonable price, and still integrate it into their tower systems or build it to stand alone. That's a service that has great demand among experimenters, robotics specialists (particularly those concerned with space, e.g. cubic inches), and some of their new lower power technologies that might have possibilities on the kind of small self driven systems I'm working on. If all goes well and a few years up the road I go to make tens of thousands of the things FSL is probably where I'll go to finish the design to board and mass produce the processing cages.
Maybe partly because it's a Texas company I can keep an eyeball on, but also because I've never heard any significant complaints about them from anyone credible.
We shall see. I hedged earnings anyway just to make sure that if it gets blown and forward guidance is negative I don't get totally hosed. I also wrote CALL options out of the money that if they execute will be profitable anyway (hard not to be when you buy under $10).
If they don't execute, well, that's fine too. I keep the premium, and if they totally tank the earnings my PUT options will be highly profitable, and if it stays static, I'll just lose part of their value and the CALLs won't execute. (the most likely scenario), in which case I'm out only alittle for having staved off a potential disaster, or a realize a gain earlier than I would have liked.
Any of the three possibilities doesn't upset me.
You are making a mistake to put Zuckerberg (owner of 25% of facebook) and a typical CEO on the same page. Beyer is only CEO. He received a healthy compensation package when being hired after the LBO. He paid taxes on the liquid part of that compensation when that was due, not these days.
You are also wrong when arguing that the unrealized capital gains are taxable. They are not and this situation does not compare with the case of mutual funds that liquidate winning assets in a downtrend and generate taxes that are shared across shareholders regardless of the gain/loss of their account. If you really know more about the financing you better come with some facts.
Beyer did not need to sell his stock to realize the gain and be taxed if he thought this is an undervalued company. What Beyer's act is telling us is that, for him, the former CEO of the company for 4 years, which knows the company inside-out and its potential, the CURRENT VALUATION IS A GOOD SELL. He also knows that there could be ups and downs as the semiconductor industry is cyclical and he might hope for the better for the remaining shares in the distant future. But, for now, it is a good price to sell. Or, he urgently needed a holiday property in Dubai and dig deep into the pockets for several millions (and that his checking accounts hiring compensation package are already depleted).
D'uh, he has to sell shares now that the company is public to cover his realized capital gains.
How long you been doing this?
As soon as his stock became publicly traded equity he took a SERIOUS capital gain that has to be offset. This is one of the dilutative effect of their efforts that business founders and early insiders have to look forward to as a part of going public, unless you can cover the gains against par on your own.
Even Zuckerberg had to sell some of his FB shares to settle tax requirements. It's also a reason he shifted the real power of the company to the preferred stock. This way he can take a serious hit on his common stock holdings and not dilute ANY significant amount of his voting authority.
He sold 350,000 shares out of 450,000 available in early Dec 2012.
He sold 320,000 shares out of 2,550,000 available in early Jan 2013 (stock options).
Bottom line: he sold about 25% of his shares recently. He feels this is a local peak of the semiconductor momentum and sells some. Pay some attention to this.
If by analogue engineers you mean nano scale analogue then you're right, I agree, but not many shops are doing fabrication today within the US. Frankly part of what's killing US fab is that the materials involved, no matter how small an amount may be involved, are highly regulated by the EPA. This was one of the reasons Apple couldn't come up with a development plan to let them build some of their stuff here. That and the INCREDIBLY high capital start up costs for all but the most limited experimental equipment. (e.g. hand jobbing wafers, something I haven't seen done since I attended an engineering conference in Illinois and got to explore their fab lab). Yes, you can make some good things with such equipment, but you can't output large small die large diameter wafers in quantities that make you anywhere near competitive with China unless they have enough IP in them that you don't want to share that most of their value is in their function. Then you're good just until it the Chinese manage to get a hold of one of your chips and reverse mask it.
Freescale has this HUGE gap they can step into if they do it right. I'm more angry at their business expansion people who have missed a big bet by repackaging some of the 32bit development systems (the exportable stuff) into hobbyist robotics and process control kits. It's about time we put more emphasis in engineering curricula on some business management too. I found in the real world where most of my University "well rounded student" electives would have been better spent in business classes. Too many companies have gone down because some idiot MBA who didn't understand the industry got put into a position of authority. I made serious mistakes as a CTO because I didn't really know how to manage a CEO who consistently grilled my senior programmers and took their advice unfiltered through me. It eventually cost the company millions of dollars and two bankruptcies before he started to listen to my advice, by which time I was long gone. What I SHOULD have done is gone to the board and said "Listen, we gotta lose the swimming pool supply salesman and just get an administrator in here".
You obviously confuse computer chips with potato chips. Analog engineers are very hard to come by and the lint was removed about 5 years ago. Now they are letting very talented people go because the previous management allowed the company to run in silos. Some had really good quality control and some ran like Mom and Pop shops. The engineers are all really talented. They just lack consistent management. Hopefully the new leaders can make the company run as a team