Chip Equipment Stocks Drop
Wednesday July 12, 3:58 pm ET
Chip Equipment Stocks Slip After Analyst Sees Signs of Cyclical Peak
NEW YORK (AP) -- Semiconductor equipment stocks got socked in Wednesday afternoon trading after an analyst suggested the entire sector showed signs of peaking.
In a published note, Citigroup analyst Timothy Arcuri said that insight gleaned from the first day of a trade show seemed to suggest the sector has hit a "cyclical top."
"Supply chain checks suggest most tool vendors have scaled back order or shipment forecasts for the calendar fourth-quarter by about 10 percent in the past few weeks," Arcuri wrote in the note. He also added that comments from Credence Systems Corp. indicated tester utilization rates are also slowing. Credence Systems were down 8 cents at $3.36 on the Nasdaq.
Regarding Applied Materials Inc., Arcuri said the company's analyst meeting "included limited commentary on current business trends." He also noted that "the overall tone was not as defiantly near-term bullish as in prior public appearances." Shares of Applied Materials fell 46 cents, or 3 percent, to $15.68 in afternoon trading on the Nasdaq.
Arcuri cut his price target on KLA-Tencor Corp. to $50 from $58, and said that even though analysts' earnings estimates for the company are rising, he believes the company's exposure to a backdated stock options probe adds a "heightened risk factor" for the stock. KLA-Tencor shares fell $1.52, or nearly 4 percent, to $41.04 on the Nasdaq.
The analyst also said Lam Research Corp. management said it sees "potential" for a slowdown in 2007, but that it plans to use the lull to position new products ahead of the next upturn. Shares of Lam Research were down $1.85, or more than 4 percent, to $42.75. |
