LTXX.. this rather overdone correction in LTXX should bode well for earnings. You can now expect a real 'surprise' to be met with some good upside in this always wonderful earnings play. From e-mails I know there are 'diehards' of LTXX holding through this correction from 44 or thereabouts. So if they could hold through this much downdraft, I could get in for a 30% discount and be happy. LTXX doesn't report untill Thursday May 18 which gives us a few days.. A company expecting $0.22 from a previous year's quarter of $0.05 with fine analyst coverage has got to react positively before the 18th.
Boston Herald May 11, 2000. LTX's gamble on circuits hits jackpot: Company's daring move enticed big chip makers
by Greg Gatlin
Roger W. Blethen's daring game of leapfrog has paid off big time for LTX Corp., the Westwood semiconductor test equipment maker.
Three years ago, the LTX chief executive saw a telecommunications and wireless boom changing the way chip makers designed devices.
Blethen figured if LTX could latch on to the shift first, it could outrun bigger chip-testing rivals.
At the time, LTX supplied its digital and mixed-signal chip-testers to niche players, but hardly any of the big boys.
Most semiconductor testing equipment companies were focused on chip makers producing ever-faster microprocessors for personal computers, including the granddaddy of them all, Intel Corp.
Blethen made a different bet.
An emerging communications revolution was fueling explosive demand for integrated circuits that could power high-speed networks, wireless networking equipment and such wireless consumer devices as cellular phones, personal digital assistants and portable Internet terminals.
People no longer needed to be linked to their PCs to access information. They were going wireless.
Chip makers, trying to power smaller, more sophisticated electronics, were combining a broad range of semiconductor technologies - digital, mixed-signal and embedded-memory processors - onto a single, more powerful integrated circuit: a system on a chip.
But test equipment makers, including LTX, were still making gear and programs that tested each of those processors separately.
Blethen's gamble: Create a system that can test digital, mixed-signal and memory devices in a single test step, and the big chip makers would ante up.
Jackpot.
Since shifting gears and launching its Fusion system-on-a-chip tester less than two years ago, LTX has won the business of eight of the top 12 semiconductor makers, including Texas Instruments, Motorola, Lucent Technologies, Samsung, Philips and Hitachi.
``The (semiconductor) industry's vision was very clear,'' Blethen said.
``The industry's vision was, `We're headed toward communications on the Internet, and it's going to be system on a chip.' ''
While other chip-testers concentrated on the microprocessor market, or continued to use narrowly focused testers, LTX went against the tide, Blethen said. ``We went for broke.''
After emerging from a prolonged semiconductor slump that dragged the industry down into last year, LTX's sales in the most recent quarter surged 108 percent to $70.2 million from $33.7 million in the year-ago period.
Earnings leaped 991 percent to $12 million from $1.1 million a year ago.
LTX shares, trading near $5 a year ago, soared to $50 in March.
``Arguably they were on the verge of being nowhere about a year and a half ago,'' said Vincent Benedetti, an analyst with Gruntal & Co.
``I view these guys as a transformed type of company.''
But to get there, Blethen has put LTX through a major - and painful - overhaul.
In shifting from multiple lines of digital and mixed-signal testers to a single product line of Fusion system-on-a-chip testers, LTX has streamlined operations, and outsourced much of its manufacturing.
In the depths of the semiconductor slump two years ago, LTX slashed 300 jobs. Where once it had three buildings in Westwood, now LTX has one.
Blethen, a founder of the 24-year-old company, says LTX runs smarter now. It employs nearly 700 workers, including 350 in Massachusetts.
``What you want . . . is basically a light, fast, modern, quick decision-making structure,'' Blethen said.
``What we did was we unloaded as much management, infrastructure and overhead around the world, so we could pile the majority of our resources into development of Fusion and key capabilities for specific customers.''
Analysts say the company is better positioned to withstand the next semiconductor industry downturn, although it's by no means immune.
In the last slump, LTX had second- and third-tier customers.
Now the company's customers include top players that likely would order more testers than smaller companies, even in a downturn, Benedetti said.
``Everybody feels the impact of a downturn, but the sustainability this time will be different,'' he said.
And there's no slowdown in sight for semiconductor companies focused on communications.
Blethen says the industry is at the beginning of a multiyear expansion, driven by new communications, Internet, networking and wireless technologies.
``I believe that wireless technology will do for portable electronic products what the Internet did for software,'' he said. |
