Good Data For Chip Equip Makers Tempered By Kulicke News
12:55 GMT-04:00 Friday, May 17, 2002
NEW YORK -(Dow Jones)- North American manufacturers of semiconductor equipment had a book-to-bill ratio of 1.20 in April, the eighth month in a row the ratio has improved and only the second time since November 2000 the ratio has been above 1.00, a trade group reported Thursday.
But negative comments from chip equipment maker Kulicke & Soffa Industries Inc. (KLIC) on Friday tempered investors' reaction to the good news.
While the book-to-bill ratio of 1.20, which means that $120 worth of new orders were recorded for every $100 of products billed for the month, was cheered by analysts, it did little to boost shares of chip equipment stocks.
Shares of Applied Materials Inc. (AMAT) recently were down 27 cents, or 1%, to $26.86, even as the company on Tuesday said orders in the current quarter should climb 10% to 15%.
Meanwhile, shares of Novellus Systems Inc. (NVLS) traded down 1.4%, and Lam Research Corp.'s (LRCX) were off 1.8%. Shares of KLA-Tencor Corp. (KLAC) were down 1.7%.
Shares of Kulicke & Soffa, which Friday said its third-quarter revenue likely will come in at the low end of its forecast range of $130 million to $140 million, were off 13%, or $2.62, to $17.04, on volume of 3.7 million. Average daily volume is 1.1 million shares.
Investors also took issue with Kulicke's comments that customers are opting to buy its older bonding semiconductor equipment as opposed to its new-generation product that has higher average selling prices.
Kulicke's comments aside, analysts said there are reasons to be bullish on the chip equipment sector.
Analysts said the book-to-bill ratio, although a lagging indicator, is further evidence that the semiconductor capital equipment sector is in recovery mode.
Shekhar Pramanick of Prudential Securities said contrary to concerns that chip equipment orders will slow in the summer months, there will be sequential monthly order improvements over the course of the year.
"We believe there could be further upside potential for semi equipment orders in the September quarter," wrote Pramanick in a research report.
Pramanick reiterated his buy rating on shares of Applied Materials, Novellus, KLA-Tencor, Lam Research, Rudolph Technologies Inc. (RTEC), FEI Co. (FEIC), Teradyne Inc. (TER) and Kulicke & Soffa and said weakness in these stocks represents a buying opportunity.
Echoing Pramanick's assessment, Edward White, an analyst at Lehman Brothers, said he expects orders to increase 14.4% in May and that the overall book-to- bill ratio will continue its upward trend, reaching 1.28 in May. |
