2:27PM Micron Tech (MU) 26.80 -1.05 (-3.8%): Lehman analyst Dan Niles cuts NovQ est to ($0.40) from ($0.20) and FY02 to ($0.90) from ($0.40). While tempting to focus on current spot market strength to buy the stock, feels that valuation and normal seasonality ahead calls for a more cautious approach. Thinks Hynix is the one big wildcard; if MU can gain control, would be huge for company.
On today's session, sell pressure on semiconductors held the broader markets in check. By the end of the day, the Philadelphia Semiconductor Index or SOX had dropped 2.7% following a few developments from companies in the sector...
First, chip equipment maker Novellus Systems (NVLS -8.5%) experienced sell pressure after guidance it issued during the company's mid-quarter update. Management said it expects to post a fourth quarter profit of $0.11 per share, which is a penny ahead of the consensus estimate and in line with prior guidance. Yet at the same time, management lowered its bookings guidance and stated it expects a net loss for the company's first quarter. Following the company's remarks, Robertson Stephens came out with a downgrade on NVLS shares, lowering its rating to Market Perform from Buy...
Separately, Lehman Brothers analyst Dan Niles raised his fourth quarter estimates on Intel (INTC +1.1%). His fourth quarter earnings estimate went to $0.10 per share from $0.08 per share and he also increased projections for fiscal 2002. Nonetheless, the Niles call was not entirely bullish. Though he expects Intel to raise its revenue guidance during the company's mid-quarter update, he believes the recovery will be U-shaped and says investors should sell into the company's December 6th mid-quarter call...
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