From SM-As expected, most chip-equipment shares are being boosted by positive
news from the industry's trade show, Semicon West. "Day two of Semicon
West is complete, and the summer-of-love reunion atmosphere in San
Francisco continues to build momentum. There are rumors that day three
may be relocated to Haight/Ashbury," joked Morgan Stanley Dean Witter
analysts Jay Deahna and Steven Pelayo in a note.
At the show, several companies, including KLA-Tencor, Lam Research,
Applied Materials and Gasonics International, held analysts' meetings.
KLA-Tencor has been telling investors for several months that bookings
would likely decline in the first quarter of fiscal year 2000 (ending
September). But after meeting with the company, Deahna and Pelayo said
they think flat bookings would be the worst-case scenario. In fact, they
think bookings will actually be up from the preceding quarter.
There could be a couple of earnings surprises coming as well. Lam
Research could deliver a positive earnings surprise "with a rapidly
improving margin story" when it reports fourth-quarter results on July
29, the analysts said. The company has what the analysts say is an
impressive new chip-testing tool, the Excelon. Gasonics International
could also have a nice earnings surprise when it reports its fiscal
third-quarter results. The company expects bookings and revenue to
increase each quarter sequentially this year.
Meanwhile, SmartMoney pick Applied Materials thinks it has taken some
market share away from Novellus Systems with one of its testing products
called the Producer.
Separately, shares of chip-equipment maker Teradyne rose Wednesday after
Deahna and Pelayo initiated coverage with an Outperform rating and an
$85 price target. Teradyne is expected to benefit from growth in the
automatic test-equipment market over the next five years. As the
industry continues to rebound, the analysts see the company's revenue
increasing to $400 million in the second quarter, up 16% from the
previous quarter. Their second-quarter earnings-per-share estimate is 39
cents a share, a penny higher than the consensus estimate. MR |
