Dow Jones Newswires -- October 10, 2000
Dow Jones Newswires
PMC-Sierra On Solid Ground Despite Peer Downgrades
By STUART WEINBERG
Of DOW JONES NEWSWIRES
TORONTO -- PMC-Sierra Inc. (PMCS) is doing just fine, analysts say, although its stock is
lower Tuesday after the ratings of two prominent semiconductor companies were cut.
Bear Stearns analyst Charles Boucher said he expects PMC-Sierra to exceed third-quarter
expectations. "More importantly," he added. "we expect to hear the company give bullish guidance
on Q4 as well. I don't think there's any weakness in their market at this point, and I think the
weakness in the stock is unjustified."
As reported, analysts from Lehman Brothers and Salomon Smith Barney downgraded their ratings
for Xilinx Inc. (XLNX) and Altera Corp. (ALTR) Tuesday.
Salomon analyst Clark Westmont cut both companies to "outperform" from "buy," citing "continued
deterioration in the environment for general purpose semiconductor chips," while Lehman analyst
Daniel Niles cut the companies to "neutral" from "outperform" because revenue growth rates for the
next two quarters are likely to slow "noticeably."
The downgrades have sparked a sell-off in the communications semiconductor sector. As a result,
PMC-Sierra is down about 11% to 169 1/2 on Nasdaq, on about 8.9 million shares.
"I don't think it's anything specific to PMC," UBS Warburg analyst Gregory Mischou told Dow
Jones. "I think they're just trading down in sympathy."
Mischou said he is forecasting third-quarter revenues of $153.9 million and net of 25 cents a share
for PMC-Sierra, which is scheduled to release its results on Thursday. A First Call/Thomson
Financial poll of 24 analysts is projecting net of 26 cents a share.
BMO Nesbitt analyst Brian Piccioni said PMC-Sierra has performed extremely well and that most
people expect that to continue. "Their dollar sales per switch can continue to grow for some time,"
he said.
Piccioni is forecasting net of 25 cents a share in the third quarter on revenues of $151 million.
Company Web site - pmc-sierra.com
-Stuart Weinberg, Dow Jones Newswires; 416-306-2026;
stuart.weinberg@dowjones.com |
