1) No GAAP profits in 2012. Because they'll have no GAAP profits in 2012, they try to BS everyone by talking about NON-GAAP profits. Classic diversionary tactic.
2) The only reason they made any money at all in Q3 was because Samsung made a $30 million royalty payment. That's the end of the big payments. The future payments drop to $6 million and that won't save this company.
3) 4 quarters of restructuring charges. This company is so badly damaged that it'll take almost all of 2012 to restructure. This of course means more than the already promised 5% layoffs in Austin and Sunnyvale.
4) Wireless business is crashing.
5) Days of Inventory ballooned to 104 vs. 72 in Q2. That's an unbelievable 44% increase in crap they couldn't sell. This inventory will be written down to loss levels in the future. They are currently writing down inventory by $10 million.
6) Their ancient Austin fab screwed up $4 million of product. The Austin fab is poorly run with absolutely appalling management. For some reason, Kissnspurt can't get up the balls to dump this factory.
7) Spansion will be distributing 8.5 million more shares over the next few quarters thus diluting shareholder value by more than 12%.
8) Spansion is still using it's NOLs from it's bankruptcy 2 years ago. When these are used up, their tax rate will go up if they ever make money.
9) Their fabs are running at low utilization rates. These rates mean higher costs per product. Since demand for Spansion products is drying up, these fixed costs will continue to go up.
10) The company itself is shrinking and having to use subcons because it can't figure out how to run the internal businesses themselves.
11) Delays in new product development including embedded NAND.
12) Consolidating parts assembly operations to Bangkok which is currently being flooded. Maybe they should move the Austin fab to Bangkok!
13) Confidence in Spansion management. Kissnspurt and Randy Furr sounded feeble and confused on the conference call and gave the impression that they have no idea where this company is headed.
14) After Kissnspurt railroaded the company into bankruptcy in 2009 and pocketed his $1,000,000 bonus, the best talent fled this company in droves. Now they're left with mediocre talent at best as evidenced by the Austin fab $4 million screwup. And that's only the big screwup.
What a sad company Spansion is. It almost breaks your heart.
Oops! I forgot to mention the biggest screwup of them all. Kissnspurt says Spansion will LOSE between 53 cents and $1.12 per share in Q4 2011. The 4th quarter of any year is traditionally the STRONGEST quarter for technology companies. Imagine the catastrophe Spansion will report in Q1 2012, traditionally the WEAKEST quarter for technology.
Oh what a tangled web we weave, when first we practice to deceive (i.e. reporting NON-GAAP earnings).