Looks like nerves on earnings are high. Have you heard yet when they wil announce? Did you attend the annual meeting? Was it positive?
Trading under $16 now which was the last posted number I saw for book value. I'm thinking of averaging down now. Said I'd hold off until it dipped below book. Was hoping that wouldn't happen.
Here's a note from of perhaps positive news.
From the September 14, 1998 Issue of Electronic News
The Antenna
NOT IN MY BACK END--When asked, what does the latest round of DRAM fab closures mean for test system suppliers, Nick Konidaris, Advantest America chairman, president and CEO, told EN, "Those companies that are addressing the high end of the business are not going to be affected. Other companies addressing the lower part of the business are going to be affected." He said the DRAM shake-ups have "no foreseeable affect on Advantest. The overcapacity in our end of the business has bottomed out." So, when can we expect an uptick? Mr. Konidaris does not have a set timetable. With 64-megabit DRAM-and-above prices stable, additional investment by select DRAM makers will be the final arbiter of when and how fast the DRAM tester market recovers.
Solectron did well. Could be positive.
Very negative, wafer sales are down.
MEMC warns of more red ink
Wednesday, September 16, 1998
By Virginia Baldwin Hick
Of the Post-Dispatch
Bad news continues in the semiconductor industry, and it continues to trickle down to suppliers like MEMC Electronic Materials Inc., the world's second-largest maker of silicon wafers.
MEMC, based in O'Fallon, Mo., said Tuesday that its third-quarter loss would be greater than expected, and that it will continue to shut down production for a few days here and there to cut costs and reduce supply.
MEMC's wafers are made into silicon chips, which are the base for microprocessors used in computers, microwaves, cars, cellular phones, digital cameras, "smart" credit cards and a host of products that consumers take for granted.
Because of the continuing financial crisis in Asia, particularly the recession in Japan, worldwide demand is down for such products.
"This is more of a volume- or demand-driven impact," said Sam Duggan, MEMC spokesman. "We don't think we've lost market share."
Prices have softened, mostly because of pressure from manufacturers of chips and devices that use chips. Intel Corp., for instance, cut prices this week on some of its microprocessors. That price cut may spur demand for computers, and eventually for silicon wafers. But in the short run, cuts like Intel's pressure companies like MEMC to offer price breaks to their customers.
MEMC employs about 1,900 people in O'Fallon, including 1,500 in its wafer plant there. Most plant workers took a four-day Labor Day holiday this month, with the option of counting the extra days as vacation.
Such short-term shutdowns will continue at MEMC plants around the world, Duggan said. MEMC employs 6,800 worldwide, but not all will be affected by plant shutdowns.
Duggan said not all shutdowns would be keyed to local holidays, but he said he expected similar extended holidays around Thanksgiving and Christmas and perhaps other events around the world. "We're trying to better manage current capacity with anticipated demand," he said.
A company statement released late Tuesday said MEMC expects sales in the third quarter to be between $160 million and $165 million, because of lower product volume and prices. Revenue in the second quarter was $202 million, and that was down 17 percent from last year's second quarter.
MEMC will report third-quarter results Oct. 26.
MEMC also announced that its "negative margin" would be in the mid- to high teens, which could translate into an operating loss of about $30 million. The loss could be much higher when other costs are figured in.
Michael Ferguson, an analyst with Pauli & Co. in Clayton who follows MEMC, said the loss might be greater than $50 million.
In the second quarter, MEMC took a $147 million loss, including more than $105 million in restructuring costs.
Ferguson has had a "hold" rating on MEMC's stock since last October. "It's been nearly a year," he said. "I was hoping to see light at the end of the tunnel.
"I think the steps they're taking will position them well when the market turns," Ferguson continued. "I would prefer they were in better shape from a demand standpoint, but it's not something in their control. They can't just switch and make something else.''
Tuesday's announcement came after the stock market closed. MEMC closed at
$5.75, up 13 cents, but is down 62 percent so far this year.
Copyright (c) 1998, St. Louis Post-Dispatch
CNBC announced that MOT was closing a fab in Virginia. Don't know what they were making there, but again a closing is not good. In the, these steps will be very positive as it's he only way for these companies to recover. Also, new products will require purchases from ESI. I think we could dip further, but long term it is probably a good buy here. Still, who's got long term money here?
Maybe Greenspan says the right thing?
Regards,
Mark |
