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ÿ<Picture>Cymer Shares Slipped On Prospect Of Lower 2nd-Quarter Net
Dow Jones Online News, Friday, April 24, 1998 at 17:00
NEW YORK -(Dow Jones)- Shares of Cymer Inc. shed 9.9% Friday after
the company said second-quarter 1998 earnings would be lower than those
of the first quarter, one analyst said.
At the close, Cymer (CYMI) was off $1.688, or 6.68%, at $23.563, on
volume of 2.4 million shares. Average daily volume is 958,700. Earlier,
the shares traded as low as $22.125, down 12.4%.
Cymer makes excimer laser illumination sources for deep ultraviolet
photolithography used in the semiconductor industry.
Henry Voskoboynik, an analyst at Forum Capital Partners, said Cymer
guided analysts to lower second-quarter earnings estimates during its
first-quarter earnings conference call.
Cymer reported earnings of nine cents a diluted share in the first
quarter, short of the year-earlier 14 cents but matching the First Call
mean estimate.
Analysts predict that the company will earn eight cents a share in
the second quarter, according to the most recent First Call estimate.
In its earnings release, the company attributed the lower earnings
view to planned increases in research and development expenses and
narrower gross margins due to an increase in production costs.
Also contributing to investor wariness Friday, according to Morgan
Stanley Dean Witter analyst Jay P. Deahna, is heavy press coverage
warning that Cymer faces increased competition - coverage he called
"more hype than anything."
"Nothing has changed competitively," Deahna said.
Voskoboynik said Cymer's market supremacy may be eroded somewhat over
the next few quarters, but the problem is not a serious one for the
company.
"They enjoy 90%-plus market share right now," he said. "I don't think
that is sustainable, but the market is growing."
Further, the analyst thinks the stormiest fiscal weather for Cymer
will have passed by the third quarter.
"Next quarter will be the trough in earnings," he predicted. The net
"will increase sequentially from there."
Revenue already has hit bottom, he added, and should be flat to
slightly higher in the second quarter.
Deahna also was optimistic about the stock's future performance. The
selloff was a "knee-jerk reaction stock to a big run up at beginning of
quarter," he said. "It got a little overheated, but I think its an
enormous buy in the 20s."
Company officials were not immediately available for comment.
-Justin A. Oppelaar; 201-938-5175
Copyright (c) 1998 Dow Jones & Company, Inc.
All Rights Reserved.
Companies or Securities discussed in this article:
SymbolNameNASDAQ:CYMI
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