From Briefing.com: 6:36PM Tuesday After Hours price changes vs 4pm ET levels: Leading chip equipment company, Applied Materials (AMAT 12.97 -0.49), posted better than expected top- and bottom-line results for fiscal Q3 (Jul), but its stock is under pressure following an admission by management that customers have taken a more conservative stance in the three weeks since Semicon West. For fiscal Q4 (Oct), AMAT expects orders to be down 5-15% sequentially, revenue to be flat to up modestly on sequential basis (Multex consensus $1.541 bln), and EPS 'to improve' from Q3 results (consensus $0.09)... The fiscal Q1 (Jul) pro forma profit of $0.05 per share reported by Network Appliance (NTAP 7.75 +0.70) was a penny ahead of the consensus estimate. NTAP, in turn, said it expected sequential revenue growth of 2-5% (consensus $223.9 mln) and EPS to be pretty flat (consensus $0.05). Generally speaking, NTAP's guidance isn't as bad as had been feared given the difficult market conditions.
5:23PM Applied Materials to certify financial statements (AMAT) 13.46 -0.12: -- Update -- Says it will be certifying financial statements by required due date... separately, would note that guidance for sequential decline in orders of 5-15% is a bit better than analyst expectations, which fall in range of 10-20% decline... AMAT -0.51 at 12.95
5:13PM Applied Materials gives Q4 guidance (AMAT) 13.46 -0.12: -- Update -- On call, says it expects orders to be down 5-15% sequentially in fiscal Q4 (Oct), revenue to be flat to up modestly on sequential basis (Multex consensus $1.541 bln), and EPS "to improve" from Q3 results (consensus $0.09)... AMAT -0.51 at 12.95
4:39PM Applied Materials more cautious (AMAT) 13.46 -0.12: -- Update -- On conference call, company sounds a more cautious note - says customers have taken a more conservative stance in the three weeks since Semicon West due to uncertainties about the global economy and weakness in end user demand. Stock at 13.39 after hours.
4:19PM Applied Materials Reaction : Initial response to the AMAT results is muted. Prices vs 4 pm ET close -- AMAT +0.19, NVLS -0.11, KLAC -0.41, INTC +0.06
4:03PM Applied Materials beats by two cents (AMAT) 13.46 -0.12: Reports Q3 (Jul) earnings of $0.07 per share, $0.02 better than the Multex consensus of $0.05; revenues fell 7.4% year/year to $1.46 bln vs the $1.29 bln consensus; Backlog at the end of the third fiscal quarter of 2002 increased to $3.30 billion, from $3.11 billion at the end of the second fiscal quarter of 2002.
4:11PM Network Appliance beats by a penny, names new CFO (NTAP) 7.05 -0.37: Reports Q1 pro forma EPS of $0.05, $0.01 better than the Multex consensus; revs were $206.8 mln, vs consensus of $210.8 mln. Co also announces that it has appointed Jeff Allen to the position of EVP of Business Operations, and named Steve Gomo to the position of Senior VP of Finance and CFO, replacing Allen.
3:40PM Market Tumbles : Difficult to explain the sharp decline in equities following Fed decision to leave rates unchanged. While many market observers expected a reflex pullback, fact that most professionals didn't anticipate the Fed making a move suggested declines would be limited. Another possible factor are reports that the U.S. is chartering ships to bring aircraft and heavy equipment to the Red Sea. Possible that this is being interpreted as a sign that the U.S. is expediting its plans on Iraq.
3:00PM Market Averages slightly weaker : -- Technical -- Volatility has increased in the wake of the Fed announcement but the market averages are still locked within the two day trading range. Short term supports are at 1293 and 1288/1286 Nasdaq Comp, 897 and 892/891 S&P 500 along with 8575, 8540 and 8505 for the Dow.
2:56PM Fairchild Semi breaks Sept 25 one-yr low of $13.76 (FCS) 13.50 -1.10:
1:58PM Dell Computer (DELL) 26.60 +0.70: Disagreeing with bullish opinions incited by recent upturn of Nasdaq, Banc of America thinks DELL's current levels reflect overly optimistic growth assumptions, particularly heading into what firm expects will be lackluster back-to-school/holiday season. Firm refuses to dispel its longer term valuation concerns, despite expectation of in-line Q203 earnings (due on 8/15), continued share gain in most segments and geographies, and today's product launch, which expands co's partnership with EMC; suggests to get more constructive on shares at around $20. Despite cautious note, shares are continuing to trace Nasdaq's advance, currently trading 2.7% in the green.
1:39PM Enterprise Software : Goldman Sachs's Rick Sherlund remains cautious for the remainder of 2002: believes anemic economic growth expected for 2003 will require est reductions for broader software sector ... also expects longer-term growth rates for tech cos will be revised downward, given protracted slowdown in IT spending ... near-term, Goldman believes ORCL's Aug quarter results (released mid-Sept) may be viewed as a proxy for rest of sector; stresses 2002 ests may have been lowered enough, but clearer read on Dec qtr IT spending/budget flush is needed.
12:55PM Sun Microsystems (SUNW) 4.27 +0.15: Today Chairman and CEO Scott McNealy announced co's first Linux-based, general-purpose server, LX-50. Prudential thinks introduction marks significant technological departure for SUNW; believes strategically co. needed to offer a Linux product, but thinks substitution will occur, reducing profitability. According to Banc of America, in its move to gain share at low end rather than offer low prices to retain customers, co. is taking more offensive posture than expected; despite concern, reiterates Buy rating; thinks shares offer attractive risk/reward. Although comments by brokerages are only lukewarm, shares are up 3.6% on news.
12:28PM Computer Hardware Sector: This is a sector in which the near-term catalysts are limited, yet conversely the downside from a fundamental perspective also appears to be restricted. The group has undergone maturing pains of late which have been exacerbated by macroeconomic softness. In addition, hardware's over-investment appears to be taking time to work off. While the sector is expected to rebound nicely, this may involve some delay as the over-installment needs to age before a real replacement cycle can kick in. Yet on the positive side for the industry, many analysts are looking for a secular upgrade cycle in the first half of 2003 -- any upside could be magnified if we experience a notable recovery in business and economic conditions (please -- hold your laughter). Nonetheless, it's worth keeping in mind that the fundamental outlook in the semiconductor space appears to be dragging which likely indicates computer hardware will need time to ramp as well. Among the few more recent positives, are signals that Europe may be returning to year-over-year growth. From an investment perspective, expectations are on the low side for computer hardware companies which means it should be difficult to disappoint. In addition, the sector faces soft comparisons in upcoming quarters which suggests that a bottom from an earnings perspective is likely close at hand. Also note that the more recently mixed industry data is an improvement over two years of decidedly negative industry fundamentals. The issue at this point is assessing the relative valuation of the group -- which is attractive on a historic basis -- versus the more promising though somewhat uncertain outlook for recovery. After weighing both sides of the equation with an emphasis on the longer-term outlook, we are maintaining our rating on the group at Market Perform. -- Mike Ashbaugh, Briefing.com
10:14AM OSI Systems Inc. (OSIS) 16.43 +1.96: A look at the one-year chart on OSI Systems tells its story relatively well. If you look closely, you can see this company's value actually rose after September 11th while the balance of the U.S. markets got crushed. Also note that since the initial reaction in September, OSI has retained its value reasonably well. The company makes optoelectronic devices which are utilized in a variety of communications, medical, aerospace and office products. These include laser printers, laser gyroscopes, weapons sighting systems and medical scanners. OSI's customer list includes Lockheed Martin, Xerox, Nortel Networks and the somewhat less established but increasingly visible InVision Technologies -- nearly 80% of its sales come from North America. Yet also note that its optoelectronic devices are used in OSI's own airport security and cargo inspection systems. This morning, the shares are posting an early 15% gain on unusually strong volume. The catalyst? Management guided higher on both earnings and revenues for its fiscal fourth quarter. The company now sees earnings in the range of $0.21-$0.22 per share, which compares favorably to the Multex consensus of $0.18 per share. On the top line, OSI expects fourth quarter revenue 'to exceed' $35 million versus the current consensus of $33.1 million. The revised guidance places a firmer fundamental base under the shares -- OSI now trades at 29.3x current year estimates and 19.5x forward projections. From a technical perspective, the shares are approaching their 50-day simple moving average at 17.40 which also approximates trendline resistance going back to March. While we would be hesitant to initiate positions at current levels, we would become more bullish on its intermediate-term outlook if it could clear, and sustain a posture above, the 17.50 area. -- Mike Ashbaugh, Briefing.com
10:04AM Sector Watch: Semiconductor : Group helps lift the Nasdaq into positive territory with the index (SOX at 317) being led today by ALTR +2.5%, XLNX +2.9%, AMAT +2.7%, KLAC +2% and MOT +2%. (INTC -0.3% and LSI -0.4% lagging). Index has probed initial resistance at 319/319.80 with the closing recovery high at 321.07. The Aug high comes in thereafter at 323.56. Supports are at 314 and 312.
7:47AM Xicor upgraded at Adams Harkness (XICO) 4.12: Adams Harkness upgrades to BUY from Mkt Perform based on valuation, the belief that its mixed-signal biz is experiencing solid growth into the Sept qtr, and new mgmt additions. Price target is $7.
7:33AM Kulicke & Soffa lowers outlook (KLIC) 5.26: Warns that Q4 revenues will fall below expectations. Revises revenue outlook to $105-$115 mln (Multex consensus $136.57 mln). "End use demand for electronics products continues to be sluggish and customer visibility is poor across the semiconductor and semiconductor capital equipment food chain."
7:32AM OSI Systems raises guidance (OSIS) 14.47: Boosts Q4 outlook to a range of $0.21-$0.22, compared to the Multex consensus of $0.18. Forecasts revenues of $35 mln (consensus $33.1 mln).
7:21AM Intel to unveil new chip-making technology-- WSJ (INTC) 17.53: The Wall Street Journal reports that INTC plans to unveil today a new technology for making the world's smallest computer chips, which the co expects to boost performance and reduce production costs.
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