From Briefing.com: 9:35AM ThinkEquity on October SIA data: ThinkEquity suggests the S.I.A. figures for September continue to show good unit shipment momentum, with a slight improvement (but not a reversal) in pricing. The firm notes on a moving 3-month average basis, October sales continued a very bullish pace being up 6.8% sequentially (the strongest month since March of 2002) and up 23.3% Y/Y (matching last December's Y/Y growth level). However, ThinkEquity notes year/year growth should decelerate beginning in November until April, briefly rebound, before drifting back toward 10-13% long-term growth. The firm notes observations of a clear shift in pricing leverage into the hands of OEMs and lower consumer price points, suggesting its belief that the second half of this recovery will favor companies with strong mixed-signal portfolios and/or strong integration skills such as TXN, AGR.A and MND over pure digital capacity plays. On the equipment side, the firm notes it would avoid pure-play capacity plays in favor of technology plays (AFCO, RTEC).
9:34AM Nokia: upward estimate revisions likely in 2004 - Bernstein 18.05 +0.07: Bernstein maintains their Outperform rating on NOK, saying upward revisions are likely in 2004; firm says consensus EPS expectations for Nokia in 2004 of Euro 0.81 project a decline in profit contribution its dominant handset biz, yet given the robust state of world-wide handset demand, a well-articulated strategy for increasing mkt share, and a matchless record of execution, firm believes Nokia's actual 2004 EPS could exceed consensus by as much as 25%, yielding upward revisions and dramatic share price appreciation given the stock's multiple of 18.5x for consensus 2004 earnings.
9:00AM American Power targetting data centers -- WSJ (APCC) 21.96: The Wall Street Journal reports APCC is trying to make a name for itself in the corporate data center. The company's bread and butter for 15 years has been its backup batteries business for small computers. The article notes the third quarter was tough for many information-technology companies, but American Power's revenue rose 9.5% above analysts' forecasts and 17% above the year-earlier period. The co is the leader in the market for uninterruptible power supplies, also known as U.P.S. American Power's marketing chief, Aaron Davis, estimates that fewer than 2% of all potential customers have U.P.S., which costs as little as $39 for a PC. In addition, the co has set its sights on becoming a supplier to the corporate data center, where computer buyers always buy backup power and the average sale is $70,000.
8:50AM Wedbush raises select semi stock targets : Wedbush Morgan raises their targets for ADI to $70 from $55, ISIL to $35 from $30, LLTC to $55 from $50, and MXIM to $68 from $57, saying strong order rates from ADI and SMTC suggest an inflection point in customers' inventory policy; in the face of only 6 weeks of lead times quoted by the high performance analog IC co's, firm says a broad base of customers across many end markets are beginning to place significant 3 and 6 month orders for the first time since Q4 2000; also, firm says this is "healthy ordering" as opposed to the double-ordering that typically occurs when semi industry capacity utilization exceeds 95% and lead times exceed the 8-12 weeks manufacturing cycle time.
8:42AM 8x8 profiled negatively in NY Post (EGHT) 7.52: NY Post article takes a shot at highflier 8x8, which is up 4300% this year. Article says "voice over broadband" isn't a business any more than "faxing" is a business. It's just an activity that can take place over an existing communications network. In fact, if any money at all can be made, the cable cos that already operate the networks are in the best position to try; they at least already know who their customers actually are, and how to reach them most effectively and inexpensively. If residential subscribers begin migrating to cable-based telephone services, the phone cos will simply keep cutting prices. In a race to the bottom, 8x8 cannot win.
8:30AM ORCL upgraded at JMP 12.02: JMP Securities upgrades Oracle to Strong Buy from Mkt Outperform, raises their FY04-05 ests above consensus, and raises their target to $17 from $15; firm says checks suggest that the co will post solid Q2 results, particularly in North America, and they believe it will benefit from better sales execution and a gradual improvement in IT spending in 2004. Also, firm does not believe that Oracle will overpay for PeopleSoft and is willing to wait for the co to stumble, which they believe could occur in PeopleSoft's efforts to transition 3,000 JD Edwards World customers to PeopleSoft Enterprise or EnterpriseOne.
8:22AM SEIC upgraded at RW Baird 28.19: RW Baird upgrades SEI Investments to Outperform from Neutral based on valuation as well as their belief that business momentum is poised to improve; while technology investment will likely limit near-term earnings upside, firm says that prospects appear favorable looking into late 2004 based on SEIC's competitive position and healthy capital mkts can aid results in the meantime. Target is $40.
8:07AM BRCM upgraded to Hold at Smith Barney 36.39: Smith Barney upgrades Broadcom to Hold from Sell and raises their target to $40 from $28; while firm still expects that sequential sales momentum could slow sometime in 2004, it appears that the near-term is trending above consensus expectations.
8:03AM TriQuint Semi and Lockheed Martin announce advanced Gallium Nitride process (TQNT) 8.14: Companies announce breakthrough results for power density, power added efficiency and radio frequency lifetime for gallium nitride High Electron Mobility Transistor devices. Achieving breakthrough performance and improved reliability is an important step in significant size and weight reductions for radar-based defense applications.
7:49AM SNDK estimates raised at WR Hambrecht 80.82: WR Hambrecht raises estimates on SanDisk and reiterates its Buy rating due to strong demand and new product shipments. Firm says the benign pricing environment in Q3 appears to be continuing in Q4. The firm expects sales of USB flash drives to be exceptionally strong this holiday season.
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