Here's some more on AMCC:
09:17 ET ******
Applied Micro (AMCC) 64 3/8: This communications chip maker is down almost $7 in the pre-market. After the close yesterday, while management reaffirmed MarQ guidance, they conceded that they have seen some push-outs and cancellations of existing orders in the past week. They said that if these cancellations are merely a blip and not a trend, they expect to meet or beat expectations. They went on to say that given concerns that abound in our end markets, we are on alert. They stressed that they are reiterating and not altering guidance at this time for MarQ or JunQ and that so far this quarter, new bookings remain robust. Analysts surmise that most of the push-outs/cancellations are on older OC-12 and OC-48 products and that this weakness is mostly relegated to physical layer chips (PHYs) as opposed to framer products. Further, they believe that there has been some marginal push-outs on OC-192 products. As for specific customers, it's likely some of the push-outs are coming from weakness at Lucent (5-6% customer), Cisco (on the Cerent and Arrowpoint lines; 10% of revenue), Sycamore, and possibly Nortel on some of its older products as it ramps in favor of newer, more specialized products (NT is a 17% customer). Management confirmed, however, that Juniper was not among the list of cancellations, a concern that had been expressed earlier in the week<?b>.....This update from AMCC is clearly a negative for the company as well as the rest of the comm-IC sector. AMCC is now the second marquee comm-IC company (PMCS warned in late January) to admit to changes in order patterns. We wrote a Story Stock when PMC-Sierra (PMCS 69 3/4) warned saying that we would be cautious in holding AMCC and others. We recommend investors look less at guidance from the companies themselves but rather look at guidance from their customers. Going up the foodchain, we know that networking companies have been quite vocal about slowing demand. It's just a matter of time before it trickles down to their suppliers. The other major player in the space not to warn is Broadcom (BRCM 95 1/4). Also, Vitesse (VTSS 66 5/16) should be weak today as they supply components that are similar to AMCC's in function and speed. TranSwitch (TXCC 46 1/2) is another to watch out for given their exposure to the same 'access' portion of the communications network. -- Robert J. Reid, Briefing.com |
