HARDWARE STOCKS
Chip stocks soar in hardware recovery
By Deborah Adamson, CBS.MarketWatch.com
Last Update: 5:46 PM ET Sept. 25, 2002
NEW YORK (CBS.MW) -- Semiconductor shares shone during Wednesday's recovery in the computer hardware sector, with networking and PC issues notching robust gains after two grim days.
The Philadelphia Semiconductor Index ($SOX: news, chart, profile) rose by 7 percent while the Goldman Sachs Hardware Index ($GHA: news, chart, profile) was up 4.5 percent. The Amex Networking Index ($NWX: news, chart, profile) rose by 3.1 percent.
Shares of ASML Holding (ASML: news, chart, profile) soared by 13 percent to $6.46 after the Dutch chip-manufacturing gear firm reiterated its outlook for second-half shipments. ASML still expects to ship roughly 100 lithography systems in the period and attributed its confidence to a number of its customers who are buying leading-edge technology systems ahead of an upturn in advanced chip demand. But ASML did temper its optimism.
"With orders being cancelled or changed, and customers requesting deliveries earlier or later, the semiconductor equipment market is showing increased volatility," CEO Doug Dunn said in a statement. "Our customers and their customers are coping with uncertainty and sudden changes in demand for chip shipments. No one can predict the strength or timing of a recovery."
RF Micro Devices (RFMD: news, chart, profile) disclosed that it expects to earn about 3 cents a share on revenue of about $118 million in the second quarter. This compares to prior profit estimates of 1 cent to 2 cents a share on revenue of $109 million to $114 million. Shares were up 3.3 percent to $6.28 following the news.
Meanwhile, chip company Micron Technology (MU: news, chart, profile) reported a net loss of 97 cents, or $587 million, in the fourth quarter, wider than last year's loss of 96 cents or $575 million. On a pro forma basis, the chip firm lost 27 cents per share, wider than Wall Street's consensus estimate for a loss of 19 cents per share. Shares rose 3.4 percent to $13.39. Read the story.
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Other chip and chip equipment stocks: Intel (INTC: news, chart, profile) was up 6 percent to $15.20. Advanced Micro Devices (AMD: news, chart, profile) added 3 percent to $5.93. Applied Materials (AMAT: news, chart, profile) rose by 5 percent to $12.29. KLA-Tencor (KLAC: news, chart, profile) rose by more than 7 percent to $30.01. Teradyne (TER: news, chart, profile) added 4.5 percent to $9.62.
Meanwhile, J.P. Morgan Chase noted that Dell's agreement with Lexmark to produce Dell-branded printers and cartridges could hurt Hewlett-Packard in the long run. Credit Suisse First Boston added that since "H-P makes 55-60 percent gross profit on its consumables (such as cartridges) and uses those profits to fund an unprofitable computer business, Dell's entry into the printing business could be troubling for H-P over the longer term."
H-P (HPQ: news, chart, profile) was up 4.5 percent to $12.84. The company disclosed in a filing with the Securities and Exchange Commission that its pending plan for staff layoffs would cut 1,800 more jobs than previously planned.
Shares of Dell (DELL: news, chart, profile) were up nearly 4 percent to $24.88 while Lexmark (LXK: news, chart, profile) added 6 percent to $48.80.
Meanwhile, IBM (IBM: news, chart, profile) shares bounced off 4-year lows after SoundView analyst John Jones said he believes Big Blue should continue to exceed consensus Wall Street earnings estimates. He expects IBM to earn $1.01 a share in the third quarter, 4 cents better than the average analyst forecast according to Thomson First Call. He raised his revenue estimate by 1 percent to $19.7 billion. The stock hit an intraday low of $59.55 on Tuesday, the lowest level seen since October 1998.
"We believe the stock has been unduly pressured by negative news and cost concerns; we would be buyers at current levels," Jones said in a note to clients. IBM traded up5.5 percent to $63.01.
Among other computer hardware stocks: Apple (AAPL: news, chart, profile) rose by 2 percent to $14.93. Gateway (GTW: news, chart, profile) slid nearly 1 percent to $2.88 while Sun Microsystems (SUNW: news, chart, profile) was up almost 1 percent to $2.83.
In networking, Cisco (CSCO: news, chart, profile) was up 4.6 percent to $11.96 while Nortel (NT: news, chart, profile) tacked on 1.6 percent to 64 cents. Lucent (LU: news, chart, profile) added 3 percent to $1.01 and Ciena (CIEN: news, chart, profile) rose 12 percent to $3.86.
Deborah Adamson is a reporter for CBS.MarketWatch.com in Los Angeles. |
