a view
UPDATE 2-ATMI profit rockets, stock tanks
By Barbara Etzel
NEW YORK (Reuters) - Shares of semiconductor company ATMI Inc. fell 23 percent Wednesday after its report of a sixfold rise in first-quarter profits simply met rather than exceeded Wall Street's forecasts.
Shares of ATMI, which manufactures materials and equipment used to make semiconductors, were off 10-7/8 points at 36 in late-afternoon trading on Nasdaq.
``This is an environment where the only stocks that are moving up are the ones posting big upside surprises, and this was not an upside surprise,' Goldman Sachs analyst Gunnar Miller said. ``Earnings only met Street expectations.'
ATMI reported earnings from operations for the first quarter ended March 31 of $12.3 million, or 29 cents per share, compared with $1.5 million, or 5 cents per share, a year earlier. Including gains from investments, earnings per share were 47 cents for the first quarter.
Analysts surveyed by research firm First Call/Thomson Financial on average had expected the company to earn 29 cents a share, with the range of expectations falling between 28 and 30 cents a share.
Including gains on investments and other nonoperating income, ATMI's first-quarter net income rose this year totaled $13.5 million, or 47 cents a share.
``They had a recently completed financing. They didn't blow out the number in the quarter following the financing and in the current market you get treated pretty harshly,' Theodore O'Neill, analyst at Needham & Co. said.
Earlier this month ATMI completed a follow-on public offering of 2.8 million shares at $45 per share, which was reduced from the originally planned 3.1 million shares. About $64 million were raised from the 1.5 million shares it sold. The remaining 1.3 million shares were sold by non-management shareholders.
Company executives were bullish on the results despite the sell-off in the stock.
``We're trying to send an indication that ATMI had an absolutely unbelievable quarter where we drove a lot of our businesses to records. One that didn't make a record was NOWPak and obviously the market decided to focus on that,' ATMI chief executive officer Gene Banucci said in a conference call with analysts.
``If that's the marketplace perception that is driving the stock price right now, boy, is the world upside down. But I guess you can anticipate it in this kind of marketplace,' he said.
NOWPak, which makes up about 10 percent of ATMI's sales, fell about 12 percent between the fourth quarter and the first quarter. NOWPak is a materials packaging and delivery system used in the semiconductor production process. Sales will snap back, said Banucci.
Total revenues rose 64 percent to $61.2 million, compared with $33.5 million in the fourth quarter and $37.3 million received in the first quarter 1999.
Including NOWPak, ATMI's materials business grew 58 percent over the year earlier quarter, recording revenues of $30.3 million, primarily as a result of aggressive growth in the SDS Gas Source product line, the company said.
Other analysts were not too concerned with the NOWPak sales, which were expected to be realized in the June quarter.
``It gives them more confidence for good growth in the June quarter,' said Brett Hodess, analyst with Banc of America Securities.
``I guess that in this treacherous market environment just coming in line (with expectations) when the whisper numbers are higher is just not good enough,' Hodess said. ``There was no particular problem at the company.'
ATMI's technologies business grew 70 percent over the first quarter of 1999, reaching revenues of $30.9 million. That division is continuing to book business slightly in excess of the growth rate of industry front-end equipment sales, ATMI said.
Analysts said the stock action presented a good buying opportunity.
``I don't have anything else selling for that low on next year's estimates, so I think this is a great buying opportunity for a very solid, well-run company,' said O'Neill.
He pointed out that at his 2001 earnings per share estimate of $1.87, the company was trading at a price-to-earnings ratio of about 20.
Typically a company with ATMI's growth rate would be trading at a price-to-earnings ratio in the high 20s, Hodess said. |
