From Briefing.com: 6:00PM Thursday After Hours prices levels vs. 4 pm ET: Today's action-packed regular session is followed up by a busy after hours trade with several companies releasing key news items. Unfortunately for the bulls, the tone of most announcements is again negative. Semiconductor name Nvidia fell way short of consensus estimates.
Presently, the S&P futures, at 1079, are 1 point below fair value, and the Nasdaq 100 futures, at 1352, are also 3 points below fair value. Company Stock Move Reason for Move
Boston Scientific (BSX) 32.30 -1.60 (-4.7%) Medical device maker extends its slide (-7%) in the regular session following the recall of 3,000 Taxus stents; This was the third recall for Boston Scientific since July 2; Tonight, Bloomberg is reporting that the FDA is concerned about the expansion of the stent recall and will meet with the company tomorrow to discuss broadening the probe; Investors will want to keep an ear out for information on the company; Also look for Johnson & Johnson (with its rival Cypher) to outperform on the news
Emulex (ELX) 10.00 -0.08 (-0.8%) After cutting its expectations twice for Q4 (June), storage company tops the downwardly revised EPS forecasts by a penny (at $0.19) on revenues that were roughly in line at $86.4 mln; Emulex then goes on to warn for its next reporting period: puts Q1 (Sept) EPS and sales at $0.09-0.10 and $73-76 mln, as compared to the consensus estimates of $0.14 and $77.4 mln; Stock does not sell off, though, as much as one would expect as ELX closed $0.02 off its 52-week lows; Rival QLGC (-2%) has been hit in the aftermath
Nvidia (00C0) 11.15 -3.41 (-23.4%) Graphics semiconductor name gives a Q2 (July) report that can be safely described as disastrous; After issuing weaker than expected revenue guidance on July 28, company still manages to miss the Reuters Estimates consensus by a wide margin - EPS down 79% to $0.03 (consensus of $0.15) and sales down 1% to $456 mln (consensus of $503 mln); Blamed 'several unusual market events;' On its call, management took a conservative stance in regards to Q2 (Oct); Peer ATYT (-6%) has also taken a fall tonight
Pixar Animation (PIXR) 67.99 +1.99 (+3.0%) Animation studio crushes the Street's forecasts for Q2 (June) - coming in at $0.63 (consensus of $0.37) for EPS and $66.3 mln (consensus of $48.1 mln) for revenues; Predicting Pixar's earnings, though, is difficult as it just releases one movie every 18 months to 2 years; Management said it was comfortable with Wall Street's expectations (EPS of $0.20) for Q3 (Sept) and added it aims to have a new distribution deal in place about 18 months before the release of its 2006 film; The NY Post reported (July 21) PIXR might still pick DIS as the distributor
THQ Inc (THQI) 18.86 +0.47 (+2.6%) Interactive entertainment provider signs an agreement with Pixar for the exclusive rights of its four next movies, post 2006; Company already holds the rights to video games for Finding Nemo, The Incredibles (2005) and Cars (2006); Deal extends four years after the release of each film and includes all current and future video game consoles; Stock recently got crushed last Thursday on the company's Q1 (June) miss and Q2 (Sept) warning; Stock is nearing its 200-day at 19.0 tonight
Tomorrow, all eyes will be on the July employment report - especially after June's softness and the recent run-up in oil. The consensus estimate for nonfarm payrolls is +243K, although Briefing.com would peg it at +215K. For more insight into what to expect, visit Briefing.com's Looking Ahead column.
For more detail on these, and other developments, be sure to visit our Stock Market Update and Daily Sector Wrap. -- Heather Smith, Briefing.com
6:36PM Swing Trader: LPNT, KSS, MSFT, IRF, STJ, ERTS : Markets put in a steady grind lower in the morning, a lunchtime pause, and an afternoon sell-off. Is FEAR a factor yet? According to Investor's Intelligence readings...No. In fact Bullish sentiment has yet to show a significant decline since June! There seems to be too much complacency in this market as stocks tumble. Maybe its the summer doldrums and the market is just falling on its own weight. Maybe its disappointing earnings. Maybe its crude at a record high. Whatever the case, the market has been telling us something is wrong for months. The Nasdaq closed at a new 11-month low today and the odds favor the Dow and S&P will follow suit. Charts continue to show stocks breaking down and upside breakouts failing. The overall strategy remains the same: (continued)
2:39PM Asyst Technologies (ASYT) 4.97 -0.62: Asyst Technologies reported pro-forma EPS of $0.04 on revenue of $140.937MM (+211.3% Y/Y) vs. Reuters Research consensus at $0.03 on $141.13MM. Gross margin increased 1,352 bps Y/Y to 23.3%. Operating margin increased 5,372 bps Y/Y to 3.4%.
Sales of tool and fab automation products at ATI were $73.4MM (52% of sales); gross margin was 35.7%. Sales of AMHS (automated material handling systems) at Asyst-Shinko, the company's 51%-owned joint venture, were $67.5MM (48% of sales); gross margin was approximately 10%.
Total net bookings increased 142.9% Y/Y to $108.1MM. The company exited the quarter with backlog of approximately $135MM; ATI with $63.5MM, down 18.7% Q/Q, reflecting a 32% decline in 200mm bookings partially offset by a 16% increase in 300mm bookings; and ASI with $44.6MM. Subsequent to the quarter, ASI won a large FPD project valued at approximately $120MM for Q2.
By geography, Asia/Pacific accounted for 33% of bookings; North America 35%; Japan 28%; and Europe 4%.
Management said demand for 200mm products slowed down from the second half of last year but the long-term outlook, particularly in China, remains robust. Additionally, 300mm, which offers twice the market opportunity per fab compared to 200mm, is picking up.
Guided for Q2 pro-forma EPS of $0.02-0.04 on $145-155MM (+182.7-202.1% Y/Y) vs. consensus at $0.08 on $148.27MM. Blended gross margin is expected to be 21-22%; ATI 33-34%; and ASI 13-14%.
The following table shows price multiples and Y/Y growth rates for ASYT compared against the semiconductor equipment group. Company *P/SG **P/OPG P/S Y/Y Rev Growth (%)
TTM 2004E 2005E TTM 2004E 2005E
Asyst Technologies (ASYT) 0.7 (4.0) 0.6 0.4 0.4 57.1 105.2 (2.3)
Brooks Automation (BRKS) 0.9 (9.9) 1.3 1.1 0.9 5.3 56.7 25.1
Newport (NEWP) 2.8 (46.4) 3.3 2.0 1.3 (6.7) 93.9 56.7
Semiconductor Capital Eqpt 1.7 38.6 2.5 n/a 6.8 n/a
*P/SG Ratio: Normalized Trailing 12 month (Price / Sales) / Growth ratio as of July 30, 2004.
**P/OPG Ratio: Normalized Trailing 12 month (Price / Operating Income) / Growth ratio as of July 30, 2004.
ASYT is down almost 73% since the Q2 review, Story Stocks, November 7, 2003, and is among the most reasonably priced within the semiconductor capital equipment group on both a relative value and EVA/DCF basis. Shares trade at a discount to peers, and are at fair value assuming sustained lower single digits revenue growth from F07 and 1-4% operating margin.
Capital equipment order patterns are intrinsically nonlinear and extremely difficult to predict on a Y/Y basis. Sales have risen as much as 143% and dropped as much as 63% Y/Y, but, on average, the company has grown sales at a compound annual growth rate of approximately 19% over the past seven years.
Management believes the company is gaining share in the 300mm tool front end business; pegs the market opportunity at $130MM per fab or $3B over the next two years as 24-25 new fabs come on-line; pegs the market opportunity for 200mm products at $3B.
Gross margin target is at least 40% during an upturn. Half of the company's products have blended gross margins of greater than 40%, and the balance in the 20-30% range. Management noted that the company's flagship 300mm IsoPort and Spartan product lines are designed for low cost, but that it will take three to four quarters for 300mm product gross margins to approach the levels for 200mm products. Near-term, the challenge is to maintain gross margin in the lower to mid 30% range as the mix shifts from higher margin 200mm products (sold directly to fabs) to lower margin 300mm products (sold primarily through OEMs) offset ongoing cost reductions.--Ping Yu, Briefing.com |
