ALTR up a couple pennies after hitting number. Guidance for Q3 is flat to +2%.
Herb Greenberg ran this in thestreet.com -
Chip chatter: When Altera (ALTR:Nasdaq - news - commentary - research - analysis) reports earnings later today, all eyes will be on its guidance. Last week rival Xilinx (XLNX:Nasdaq - news - commentary - research - analysis), which supposedly had been stealing share from Altera, not only missed revenue estimates but guided to a 3%-5% decline in revenue next quarter. Earlier guidance had predicted a 5% rise.
"Altera and Xilinx remind me of the PMC-Sierras (PMCC:Nasdaq - news - commentary - research - analysis), Applied Micro Circuits (AMCC:Nasdaq - news - commentary - research - analysis) and Vitesses (VTSS:Nasdaq - news - commentary - research - analysis) of 12 months ago," says this column's best source from before the swoon. "Their stocks are highly shorted, their valuations are huge, they report and miss numbers and take guidance down severely, have huge multiples -- yet their stocks don't go down."
Hold on. These stocks already have been bludgeoned from their peaks. "But they're not down nearly enough," the short says.
He notes that the telecom industry, a huge market for these companies, continues to get bloodied. Just today, BellSouth (BLS:NYSE - news - commentary - research - analysis) reported a miserable quarter.
Meanwhile, the declining prices cause shorts to cover "while longs buy, thinking the bad news is out," the short says. "The only issue is to look at where the PMCs, Applied Micros and Vitesses are today. Xilinx and Altera will miss again, and these high P/Es for what people will figure out to be a 10% long-term growth rate will just not hold up."
So, when will this short concede the worst is over? "When all the stupid tech stocks levitating at absurd multiples -- like Applied Materials (AMAT:Nasdaq - news - commentary - research - analysis), Linear Technology (LLTC:Nasdaq - news - commentary - research - analysis) and Texas Instruments (TXN:NYSE - news - commentary - research - analysis), stocks that levitate just because they're favorites -- are cut in half. Until they're cut in half, we will not see a bottom."
From someone who has been righter than right so far! |
