In a trend I expect to snowball, PMC-Sierra (PMCS) announced they will begin using sell-through accounting as opposed to sell-in accounting with distributors. This is a trend which traces it’s origins back to the accounting issues at Vitesse Semiconductor (VTSS.PK). (see “The Trickle Down Economics of Channel Stuffing“)
I am at a complete loss to explain the markets reaction to Nu Horizons’s (NUHC) most recent quarterly results. People appear content to follow the herd for now, but the problem with being surrounded by warm bodies is it makes a quick escape impossible.
AMCC (AMCC) pre-announced a major shortfall in revenue for the March quarter and revised guidance for June down even further. The magnitude of the revenue decline is breathtaking – $76M in Dec ’06 to $70M in Mar ’07 to a projected $60M in June ’07. Analysts were projecting around $76M in June ’07 revenue.
The Vitesse (VTSS.PK) accounting debacle announced yesterday will impact other companies in the components market. My gut feeling is that other non-commodity component companies are engaging in this behavior right now. The old adage applies- if you see one roach, there are a thousand more.
All of the correlation between Nu Horizons and its competitors and suppliers has broken down. “This time is different” can be the four most expensive words an investor can use.