Warning: Cynicism ahead.
Two stories will dominate the EMS industry over the course of 2010: component shortages and health care reform. And, being naturally suspicious, I expect the industry to take full advantage of both.
To wit: It is clear that parts shortages began in the third quarter last year and are steadily mounting as demand intensifies. Component suppliers are reticent to bring massive amounts of new capacity online, and even while the SEMI equipment order books show dramatic year-over-year gains, much of that capacity won’t come into play until 2011. So problems with parts availability and even allocation will be here for some time to come.
For the past several quarters, EMS companies have been turning in improving results, but aren’t missing the opportunity to call attention to parts shortages as a reason why revenues aren’t even better than they were. In a way, the maneuver says, “Hey, we did great, but look at what we could have done,” implying that analysts should build that “potential performance” into their outlooks. It’s like getting a A- on an exam, then suggesting to the teacher how well you would have done had you had actually bought the textbook.
Then there’s health care. The ink wasn’t yet dry on the bill before AT&T said it would cost the company $1 billion in charges. That’s some mighty fast accounting from a company that still can’t get my $200 cellphone bill straight. Expect in the coming months lots of companies to “bury” operating inefficiencies and less-than-stellar financial results in their “health care” accounting.
Hey, I told you I was going to be cynical today.
ATTs calculation was actually a calculation of just one provision of the healthcare bill. Did you bother to even read the article you posted? It’s a pretty simple calculation, and why on earth would anyone expect anything other than healhcare costs to go up with the government taxing health benefits and cutting healthcare deductions? The goal of this healthcare bill was never to make costs go down. It’s to make sure health insurance companies can’t survive so the government can institute a single payer ie government healthcare program. What do you think will happen when insurance companies will be forced to take people with prexisting conditions? People will only buy insurance when they get sick that’s what. The fine is less than the cost of healthcare, only an idiot wouldnt just pay the fine and get coverage when they need it. Then when the system breaks under all these imposed regulations the people that got us in the mess will claim it’s the insurance companies fault and will tell us they have the solution. Hopefully, these companies who will have to choose between paying increased health insurance costs for their employees or paying a government fine will tell the people in this hearing they are being dragged to, to shove their ignorant regulations up their asses. America, the land where politicians will drag you to hearings if you complain that their policies are hurting your business. Insanity.
Kyle, I sure did read the article. I’m wondering if you read my comments. I’m talking about execution and opportunism and the shell game that some companies play. You seem to want to rant about health care, which is fine, but completely beside the point.
Agree with you Mike,
Even in the article..
“The congressional letters to the companies said the House Energy and Commerce Committee has made it a top priority to ensure the law is implemented effectively and does not have unintended consequences.
They also said the companies’ reports of cost burdens appear to conflict with independent analyses.”
I wonder why they bothered to report any of this?
all the info was conflicted…
You gotta wonder..
– round numbers (1 Billion)…. what’s a few hundred million among friends when rounding off these numbers?
– their statement was supposed to be addressing only one aspect of the health bill.. for all we know there are 3 more aspects of the the health bill that GIVES them back $2B. (?)
ranting and raving in public (for political reasons) . with few real , trustworthy “facts”.
in general .. the referenced article was worthless (filler)..