VSEA climbs on upgrade
By Janet Haney & Jason Margolis, CBS.MarketWatch.com
Last Update: 11:35 AM ET Feb 14, 2001
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NEW YORK (CBS.MW) -- Semiconductor stocks rose Wednesday morning, following an analyst upgrade for several companies. Also, Applied Materials announced earnings ahead of the Wall Street estimate on Tuesday.
The Philadelphia Semiconductor Index ($SOX: news, msgs) , which tracks 16 chip and chip equipment stocks, rose 3 percent to 647.58 Wednesday morning.
Upgrades
J.P. Morgan upgraded its rating on five semiconductor-related stocks: Applied Materials (AMAT: news, msgs) , KLA-Tencor (KLAC: news, msgs) , Novellus (NVLS: news, msgs) , ASM Lithography (ASML: news, msgs) and Varian Semiconductor Equipment (VSEA: news, msgs) . Analyst Eric Chen improved his rating on the five companies from "market performer" to "long-term buy."
Novellus shares were up 8.2 percent to $41.94, while KLA-Tencor shares climbed 11 percent to $41.38.
ASM Lithography and Varian shares were posting modest gains, rising 0.3 percent and 2.5 percent, respectively.
Also, after the bell on Tuesday, Applied Materials beat Wall Street estimates for first-quarter sales and profits Tuesday, but saw its gross margin shrink. The Santa Clara, Calif., company also forecast a downslide for its second-quarter outlook, as it trims back on costs. See full story.
Applied Materials shares were up 7.7 percent, rising $3.19 to $44.38 on Wednesday morning.
The leading maker of semiconductor-manufacturing equipment said it made $558 million, or 66 cents a share, excluding one-time items. The analysts' consensus estimate was 62 cents a share, according to First Call/Thomson Financial.
The company's gross margin narrowed to 48.8 percent, vs. 49.8 percent for the first quarter in 2000.
In a research note, Chen said that the "rate of decline should moderate."
Chen said, "We are encouraged by 2002 outlook, near-term pressure on the stock may provide good entry point for long-term investors." |
