News Article
Forecast challenges Quarterly Guides
Forecasts of quarterly revenues and gross margins are proving more accurate than company guidance in many cases, now being offered publicly by Advanced Forecasting, for the Silicon Cycle. Due to its quantitative non-survey methodology, the firm's reports are used to counterbalance company guidance and other estimates.
Forecasts of quarterly revenues and gross margins are proving more accurate than company guidance in many cases, now being offered publicly by Advanced Forecasting, for the Silicon Cycle. Due to its quantitative non-survey methodology, the firm's reports are used to counterbalance company guidance and other estimates.
The forecasts are geared toward investors in stocks of semiconductor and semiconductor equipment and materials companies. For the majority of the forecasts, the outlook is up to 8 months in advance, with accuracy greater than 0.9 (correlation coefficient calculated over the last 10 quarters).
The high correlation ratios indicate consistency over time, adding confidence to the applicability of the forecasts and their ability to provide a better estimate for future periods than other sources. "One example is our forecast of Texas Instruments (TXN). At the end of July 2005, TXN provided guidance for 3Q-05 centred at $3.42B. Our forecast, available in April, predicted $3.50B. Actual revenues were $3.59B," clarified Rosa Luis, Director of Marketing and Sales for Advanced Forecasting.
Similarly, Advanced Forecasting forecasts beat Teradyne's (TER) guidance of $320M by predicting $390M, while the actual quarter-end revenues were $387M. While Altera's (ALTR) outlook was $270M, Advanced Forecasting predicted $295M and actual revenues were $292M for calendar Q3-05.
All of Advanced Forecasting's forecasts are based on quantitative models developed by Dr. Moshe Handelsman, founder, nearly two decades ago. "As we have found in our core business, companies and investors have a difficult time accurately forecasting the future. They are especially vulnerable predicting turning-points in revenues and margins, which impact their investment results," observed Handelsman, adding that, "the guidance provided by companies for future quarters is often biased by human opinions. Our forecasts provide an objective view which is based only on hard numbers and quantitative methods, and not on opinions."
The forecasts are geared toward investors in stocks of semiconductor and semiconductor equipment and materials companies. For the majority of the forecasts, the outlook is up to 8 months in advance, with accuracy greater than 0.9 (correlation coefficient calculated over the last 10 quarters).
The high correlation ratios indicate consistency over time, adding confidence to the applicability of the forecasts and their ability to provide a better estimate for future periods than other sources. "One example is our forecast of Texas Instruments (TXN). At the end of July 2005, TXN provided guidance for 3Q-05 centred at $3.42B. Our forecast, available in April, predicted $3.50B. Actual revenues were $3.59B," clarified Rosa Luis, Director of Marketing and Sales for Advanced Forecasting.
Similarly, Advanced Forecasting forecasts beat Teradyne's (TER) guidance of $320M by predicting $390M, while the actual quarter-end revenues were $387M. While Altera's (ALTR) outlook was $270M, Advanced Forecasting predicted $295M and actual revenues were $292M for calendar Q3-05.
All of Advanced Forecasting's forecasts are based on quantitative models developed by Dr. Moshe Handelsman, founder, nearly two decades ago. "As we have found in our core business, companies and investors have a difficult time accurately forecasting the future. They are especially vulnerable predicting turning-points in revenues and margins, which impact their investment results," observed Handelsman, adding that, "the guidance provided by companies for future quarters is often biased by human opinions. Our forecasts provide an objective view which is based only on hard numbers and quantitative methods, and not on opinions."
