SNDK is the only SOX stock that is up this morning, despite NVLS's positive update yesterday on the semiconductor sector. Sandisk's relative strength is, I think, due to the lines of people in Europe and Asia waiting to buy an iPad, which will drive NAND sales and tilt the NAND supply/demand balance further toward shortages in the second half of the year.
Novellus Boosts Q2 Outlook; Finds No Impact From Euro Crisis
By Eric Savitz
blogs.barrons.com
Novellus Systems (NVLS) CEO Rick Hill told investors on a mid-quarter conference call that the outlook for the semiconductor equipment industry has gotten incrementally better since the company reported results on April 22.
“Growth in electronics markets remains very strong, driven primarily by this year’s growth in PC units, which is forecasted to be in excess of20% due to the corporate PC refresh cycle,” he said on the call. “If you add to that the solid growth in the mobile phone market and smart phones in particular, which are forecasted to see nearly 50% year-over-year growth, plus a robust adoption rate of new silicon-rich consumer electronics products such as iPads, all of this adds up to support what we expect to be a very robust year.”
He says the company so far is not seeing any impact from the current economic issues in Europe.
Hill says that while some forecasters are calling for 20%-25% growth in semiconductor revenues this year, he thinks the figure could actually be as high as 30%. He notes that utilization rates in Q2 are expected to average 94% in Q2, two points higher than normal seasonal levels. He notes that both DRAM and NAND prices are higher quarter over quarter.
Hill now sees Q2 bookings up 15%-25% sequentially, up from a previous forecast of flat to up 15%. He says shipments are now expected to be $315 million to $335 million, up from a range of $300 million to $330 million. Revenue is now expected to be $300 million to $320 million, up from $285 million to $315 million. The company maintains its gross margin guidance of 48%-50%. EPS is now expected to be 55-62 cents, up from 50-60 cents.
NVLS nonetheless is down 16 cents, or 0.6%, to $25.78. |
