more briefs

GOOG -- great report last week. How many companies with a run rate around $17 bill in revenues are growing 57%? can't be too many. They own the most value added part of the web -- search and that's not going to change any time soon. So many keep asking what is the next thing after search -- the reality is search is good enough for them to reach several times their size now because its such a value added activity. Gadgets -- these new ad features are going to be a big deal. How does GOOG keep the growth going -- ad innovations like the Gadgets, which open up Google to a whole new set of advertisers. at some point will see operating leverage too -- they are choosing to grow op ex so quickly that margins drop. that will change at some point and earnings will grow faster than revenues. don't expect a sharp drop in the revenue growth number -- past history of tech suggests more of a gradual decline in the growth rate.

ILMN -- didn't get the chance to listen to the call -- will try to do that soon. The press release looked pretty darn good based on revenues and guidance. It is amazing the impact of the solexa gene analyzer. gross margins declined several hundred points from over 70% to low 60's due to the big mix shift towards instrument sales away from consumables. That also impacted accounts receivable (longer payments for big instruments vs. little consumables? makes sense to me) and cash flow. the stock was down as much as 8% in after hours tonight -- if that holds I will be buying more. The shift to instruments hurts this quarter's margins but longer term it just made their installed base and their available potential that much bigger. great story.

MDT -- JP Morgan out with comments today suggesting in another 6 months all will be forgotten and the stock will be materially higher. he makes some great points in that ICDs are only 21% of revenues while neurological, diabetes, spinal, etc are larger and growing faster. Those areas are more like 42% of sales. Its possible he is too optimistic on ICDs but even if he cuts them hard it only impacts 10 cents of earnings -- $3.15 in calendar 2009 instead of $3.25. This could easily be a low $60's stock 6 months from now. Trouble is I have thought that at each step of the way and yet something has gone wrong to cause the stock to be flat for 7 years. I cringe when I realize an average stock would have doubled over the same period with good stocks up 3-4X or more. I think there is a good chance he is right but its definitely a frustrating stock.