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Author: hk2 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 361  
Subject: Re: EPS $1.08 Date: 10/25/2000 5:46 AM
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Was the concensus estimate $.94?

Yahoo has it boosted to .95 seven days ago
http://biz.yahoo.com/z/a/k/kem.html


Seems like a pretty anemic response to such stellar performance, 15% better than the estimate. Is the market worried about the so-called slow-down in the cell
phone market? I think Nokia showed that the problem is isolated to Motorolla and Ericsson. And any slowing in PC's is certainly temporary.

What is your take about the market response to the earnings report?


Some of it is the post earnings drop, which has become so fashionable these days.

Investors and analysts are on the lookout for anything unfavorable, and there are a few things that may affect KEM.

http://biz.yahoo.com/prnews/001023/kemet_earn.html
-``The tremendous growth of our industry this year has resulted in tight supplies of tantalum raw material, and some tantalum powder suppliers have already announced price increases of as much as 60%. We expect to negotiate a pass-through of these increases to our customers.

Looks like a threat to margins. (who produces this powder?)


-Looking ahead, we expect revenues to continue to grow in the range of 5-10% over the remainder of fiscal year 2001.

Quite a change from the rapid growth we've just had. Some folks may read this as an annual growth rate. (this is for 6 months)

We've also become accustomed to %100 Q to Q growth in EPS. Suddenly we're at %20 and looking at 5% (implied)


Although we're not a semiconductor company, we're treated as one (but without the high PE). Thus
http://www.dismal.com/economy/releases/release_2k.asp?r=usa_semi

The semiconductor equipment book-to-bill slid sharply in September, as bookings registered its first month-to-month decline of the year. Shipments were slightly higher than August. Part of the slowdown is seasonal, as expansion plans tail off near year-end. Nonetheless, recent price weakness in the semiconductor market bode reduced demand for new capacity during the next few months.

- The report showed a $4 Mil loss in interest income

- There was no evidence of the repurchase of 4 Mil shares they advertised
http://biz.yahoo.com/prnews/000816/nc_kemet_c.html



On the plus side, they are comfortable with projected earnings to MAR 01. At $3.80, I'll let you speculate on PE.

Fwd guidance is 15-20% into FY 02. So I would expect the current PE to fluctuate with the market.


Overall, short term doesn't look real great.

Cheers,
Jim
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