February 29th guidance

[Steve Daly]

Spreadtrum reports on the 4th quarter on February 29th. Spreadtrum
has already reaffirmed that it will meet or exceed its guidance of
$188 to 194 million in revenues and 41% operating profit margin.

However, there is an issue with guidance. The stock is down 40% from
the November high due to concern that revenues for the first 2012
quarter will be down to as low as $174 million. If revenues do fall
off from the 4th quarter levels, it will be partially due to a 1 to 3
week shutdown of cell phone manufacturers for the chinese New Year's
holiday. So this may not spook investors. Also the analyst models I
have seen have been conservative. They are not including the
potential for substantial ramp ups from Samsung and Huawei
smartphones. Possibly because they don'''t know how to estimate for
this effect.

We haven't really seen the effect of the orders for the Samsung Galaxy
S II yet because shipments didn't start until September, and we
haven't seen October through December results yet.

So even if 1st quarter guidance is down from the 4th quarter revenues,
Spreadtrum may have a good story to tell, such as smartphone orders
are very strong, and we can see a positive effect on market valuation.