Merrill Lynch analyst Tom Kurlak said on Tuesday he reduced his
earnings estimates on shares of various semiconductor companies
including LSI LOGIC CORP. (LSI: 23-5/16, - 1-13/16) and TEXAS
INSTRUMENTS INC. (TXN: 48-1/8, - 3-11/16), as well as VLSI
TECHNOLOGY INC. (VLSI: 20-9/16, - 2-3/8) and ALTERA CORP. (ALTR:
40-9/16, - 11-1/8). Kurlak said companies are experiencing slower
order rates for a variety of reasons, which, combined with excess
industry capacity, has caused weaker prices. The weaker pricing is
offsetting unit growth, he said. See Full Story at
infobeat.com
ALTERA CORP. (ALTR) 40 3/4 CLOSED. It doesn't take much to cause a stock to lose
value these days as any hint that a company could record less than projected earnings can
easily prompt investors to head for the exit door. Just yesterday, this semiconductor
programmable logic chip maker rose by almost $5 as the Nasdaq rallied and gained more than
30 points. But today, it is expected to give it all back and more as Altera is guiding revenue
estimates lower. According to the company, it sees 4Q revenues sequentially flat with its
3Q level of $162.13 million, which is being interpreted to mean that Altera expects to report
flat earnings per share in the 4Q as the company is noting product order push-out for its
revenue weakness. Altera is also noting that it sees some weakness in Asia following the
collapse of the financial markets in October. Prior to today's announcement, Wall Street
expected Altera to record a 4Q net of $0.42 a share, two cents higher than in the 3Q, on
projected revenue growth of 5% from the 3Q. The lack of revenue growth and consequential flat
earnings growth has prompted Morgan Stanley and Volpe Brown to downgrade the stock
this morning. Volpe Brown has cut its view on Altera to a "buy" from a "strong buy," while
Morgan Stanley has reduced its investment view to a "neutral" from an "outperform." Morgan
also lowered fiscal 1997 EPS estimates by two cents to $1.54 a share and its 1998 EPS
forecast to $1.80 from $1.95 a share. These downgrades, coupled with the earlier earnings
warnings by other tech firms (see below), is expected to bode poorly for this issue. From Briefing.com |
