Not-So-High Wireless Act: Returning to Texas Instruments, last night the company lowered its guidance, which shouldn't have been a shock to anyone who's been paying attention to the state of the wireless sector. There was a huge inventory build occurring in Asia, and then SARS hit. The bullish interpretation is that now that SARS is behind us (an interpretation that I do not share), there will be a rebound. But I think the inventory build predated SARS, and it will continue to be a problem. Texas Instruments cut its earnings forecast from 8 cents, plus or minus a few cents, to 6 cents, plus or minus a few cents. Now if that doesn't show how silly the whole process is -- as if 8 cents a quarter could support a $20 stock price, which is where it was yesterday.
The other point I find interesting is that until last night, Texas Instruments had been so eager to reiterate its prior positive guidance multiple times. This is a pattern seen with lots of tech companies. Why any of these companies still have any credibility, I don't understand. Of course, I don't understand why Wall Street itself has much credibility, or Greenspan has any credibility, but they all still do (for now).
128-Megabyte Bombast: Continuing on in chip land, yesterday there was a rather humorous development by way of Micron Technology (MU - commentary - Cramer's Take), the flying pig. But before going into the particulars, I would just like to explain why Micron has earned its "wings." During the mania, folks were all too eager to believe whatever stories were spun by the company's investor relations spokesperson, Kipp Bedard. My comment back then was that if Micron could actually do what it snookered folks into believing, then pigs could indeed fly.
But back to the present, and for those of you who don't know, Micron has lost money in 18 of the last 23 quarters. That's how good the company is at anticipating changes in business conditions. Micron is perennially bullish about its own abilities and about PC demand, and it is perennially wrong. Nevertheless, at a technology conference yesterday, the aforementioned Mr. Bedard said something to the effect that demand for personal computers may be tracking better than the company had previously thought. According to a Dow Jonesstory, the company expects PC shipments to be down in midsingle, rather than high-single digits.
William Fleckenstein is the president of Fleckenstein Capital, which manages a hedge fund based in Seattle. Outside contributing columnists for TheStreet.com and RealMoney, including Mr. Fleckenstein, may, from time to time, write about securities in which they have a position. In such cases, appropriate disclosure is made. At time of publication, Fleckenstein Capital was short IBM, long IBM puts, although positions can change at any time. Under no circumstances does the information in this column represent a recommendation to buy, sell or hold any security. The views and opinions expressed in Mr. Fleckenstein's columns are his own and not necessarily those of TheStreet.com. While Mr. Fleckenstein cannot provide personalized investment advice or recommendations, he invites you to send comments on his column to bfleckenstein@thestreet.com.
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