A nice story on Semi Cap Equipment growth from DJ Newswire...
CoorsTek: Big Semiconductor Upturn Seen - Analyst
DENVER -(Dow Jones)- CoorsTek Inc. (CRTK) Chief Executive John Coors voiced "cautious optimism" about the semiconductor capital equipment industry and the general economy in a conference call Wednesday.
Coors also said the first quarter, in which the company posted a sequential improvement in revenue and margin, represents an "inflection point" for CoorsTek, with positive trends seen continuing into the future. First-quarter
revenue increased sequentially 6.3%, to $74.5 million, and gross margin increased to 9.7%, from a negative 18.4% in the fourth quarter. And CoorsTek posted positive cash flow in the first quarter.
But first-quarter revenue was still 49% below the $145.7 million of a year ago, and first-quarter gross margin was lower than the 22.9% gross margin of a year ago. Plus, the Golden, Colo.-based high tech company posted a first-quarter
net loss of $4.8 million, or 45 cents a share, compared with net income of $7.8 million, or 74 cents a share a year ago.
Still, Banc of America Securities analyst Mark Fitzgerald said the first-quarter revenue figure beat his estimate of $74 million. And the earnings-per-share loss was narrower than his estimate of a loss of 54 cents per share, due
to better-than-expected cost controls.
More importantly, said Fitzgerald, is an expected sharp increase in CoorsTek's semiconductor components and semiconductor assembly business over the next few
quarters.
CoorsTeck customer Applied Materials Inc. (AMAT) is expecting a "very, very sharp" increase in its business in the next three quarters, he said, and CoorsTek will benefit from that. The semiconductor part of CoorsTek's business
represented about $27 million of its total revenue in the first quarter, and its that segment that will see fast growth, Fitzgerald said. At this point in the semiconductor capital equipment cycle, CoorsTek doesn't expect to see any
material changes in the number of OEMs (original equipment manufacturers) it works with or the number of programs it is involved with, Chief Executive Coors said in the conference call . It is now focusing on converting the programs it
is involved with to the later stages of development and production.
"We believe, because the outsourcing trend has been gaining momentum, we should be able to outpace (semiconductor capital equipment) industry growth should an upturn continue to materialize," Coors said. "Our performance in the first quarter supports this conclusion. While industry shipments decreased sequentially 9% from last year's fourth quarter, we increased our revenue 6% during the same period."
The advanced materials segment of CoorsTek is also expected to grow, partly because of an almost-finalized supply chain management contract with InVision Technologies Inc. (INVN). Assuming that contract is signed, CoorTek projects its
advanced materials segment will grow 15% sequentially in the third and fourth quarters of this year. That growth will be "largely as a result of this opportunity (with InVision)," said Coors.
The advanced materials unit accounted for $46.9 million in first-quarter revenue, and Fitzgerald said he is projecting $48 million for that unit's second quarter revenue. With 15% sequential growth, that should translate to $55.2 million in advanced materials revenue in the third quarter and $63.5 million in the fourth quarter.
CoorsTek said in its press release Wednesday that it expects sequential total revenue growth of 8% to 12% for the second quarter, which would mean total revenue between $80.5 million and $83.4 million. And it said it expects second-
quarter gross margin of 12% to 14%.
Fitzgerald said he expects to make significant upward revisions to his earnings and revenue estimates for 2002 and 2003 in light of CoorsTek's first-quarter results and guidance Wednesday. He has been projecting $320 million in
revenue for 2002 and a loss per share of $1.18. The Thomson Financial/First Call consensus estimate from analysts is a loss of 67 cents for 2002.
Fitzgerald has been projecting revenue of $410 million and earnings of 80 cents per share for 2003. The Thomson Financial 2003 consensus estimate is earnings of $2.06 per share.
In after-hours trading Wednesday, CoorsTek shares were up $1.15, or 3%, at $40.22, as of 5:48 p.m. EDT, compared with a 4 p.m. EDT closing price of $39.07, according to Nasdaq.com. |
