Robert...
I phoned the company IR yesterday. They said the downdraft was probably due to the bad news at VLSI. They felt that because both companies were in a similar...but not identical...business, that the market thought they might be in similar straits! But later yesterday
the following news item came over the wires:
11/25 Anadigics Off 8%; Analysts Cite Fallout From VLSI Bookings
By Janet Morrissey
NEW YORK (Dow Jones)--Nervous investors spooked by news of soft
first-quarter bookings by VLSI Technology Inc. (VLSI) beat up on Anadigics
Inc. (ANAD) shares Tuesday, analysts said.
At least one analyst - Rob Chaplinsky of Hambrecht & Quist - Monday trimmed
his 1998 earnings estimate for VLSI, citing sluggish wireless chip orders in
the first quarter. But he remained bullish on the wireless business and
attributed the lower-than-expected bookings to a short-term event, possibly an
inventory correction.
Investors seemed unassuaged, though, and Anadigics - which, like VLSI,
supplies components for handsets - felt their nervous wrath. Shares in the
Warren, N.J., company fell as low as 30 5/8, and late in the day were trading
at 31 5/16, off 3 7/16 or 9.9%, on Nasdaq volume of 1.2 million, compared with
a daily average of 252,700.
"It's clearly fallout from the VLSI news," said analyst Dale R. Pfau of CIBC
Oppenheimer, who says the reaction is unjustified. He and Eric Rothdeutsch of
Volpe Brown & Whelan Co. surmised that investor jitters over VLSI's soft
bookings spilled over into Anadigic's turf.
The two companies, though they both make parts for headsets, and though they
share some customers - including L.M. Ericsson Telephone Co. (ERICY) - differ
in the details: VLSI manufactures digital chipsets while Anadigics makes
gallium arsenide power amplifiers.
"VLSI's technology is based on digital circuitry while Anadigics is analog,"
Rothdeutsch said.
But both components are integrated into wireless handsets, market watchers
note - and VLSI's softness was apparently enough to make investors worry about
slugglish orders in the sector in general.
CIBC Oppenheimer's Pfau, though, said the correlation is without merit, and
that demand from Ericsson, Nokia Corp. (NOKA) and Qualcomm Inc. (QCOM) remains
strong: "There have been no order pushouts, cancellations or declines at
Anadigics."
Volpe Brown's Rothdeutsch projects 40% to 50% growth in the digital handset
market over the next year. And both analysts say they're still bullish on
Anadigics.
Anadigics Chief Financial Officer John Lyons agreed with the analysts that
VLSI's bad news triggered his company's stock decline - and that investors
were misguided to join the two companies in their minds: "What's true for VLSI
is not true for Anadigics."
Lyons added that he has seen no change or softness in the wireless market.
-By Janet Morrissey; 201-938-5400
(END)
Don't know whether this makes you feel better but it did at least stop the price from falling further.
Have a happy Thanksgiving and enjoy your turkey. |
