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Strategies & Market Trends : Market Gems-Trading Strong Earnings Growth and Momentum -- Ignore unavailable to you. Want to Upgrade?

To: iod_sherwood who wrote (5815)	3/5/2001 8:22:57 AM
From: vagabond	Read Replies (1) \| Respond to of 6445

Warnings today from CY and VTSS... ======================= Inventory builds up at chipmakers By Emily Church, CBS.MarketWatch.com Last Update: 8:11 AM ET Mar 5, 2001 NEW YORK (CBS.MW) - Two chipmakers warned Monday they'll miss their own sales and profit targets in the near-term, each citing the unexpected depth of the downturn in the communications market. Vitesse Semiconductor (VTSS: news, msgs, alerts) cut its revenue forecast range for the second quarter by about 16 percent. Cypress Semiconductor (CY: news, msgs, alerts) issued its second warning, saying it now sees a 15 percent drop in revenue for its first quarter from the previous quarter. Vitesse shares slid $2 from their Friday close to $35.50 in early Monday trading in London, according to market makers Madoff Securities. See Indications. The stock dropped 9.57 percent Friday ahead of the warning. New order delays As a business model change will lead to an expected, additional 9 percent drop in revenue, Cypress added that revenue including the one-time hit looks to be down 24 percent from the fourth quarter's $370 million. Cypress indicated in a statement that it revised its estimates for a second time amid a persistent slowdown in orders. The company "experienced cancellations and push-outs in January, but we were not alarmed because we anticipated them," said Cypress Chief Executive T.J. Rodgers. "We assumed that February and March would revert back to normal bookings but we saw no material improvement in the trends." Camarillo, Calif.-based Vitesse cut its revenue forecast range to $150-160 million from $180-190 million and lowered its net income to 21 cents to 22 cents per share from 26 cents to 27 cents per share. In a statement, chief executive Lou Tomasetta said, "due to the continuing loss of visibility among our communications customers and the unexpected decline in our storage applications, we no longer had confidence that our forecasted turns business would materialize. "We continue to see strong growth in our network processor, switch fabric and OC192 module accounts and believe these areas are softening the blow of the major downturn that has been reported by nearly all the communication IC suppliers," he added. Emily Church is a managing editor of CBS.MarketWatch.com in New York.