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Technology Stocks : Broadcom (BRCM) -- Ignore unavailable to you. Want to Upgrade?

To: A. Robbins who wrote (5674)	3/7/2001 11:25:26 PM
From: Jack Hartmann	Respond to of 6531

RS on BRCM Broadcom Corporation [NASDAQ: BRCM $53.63] 2001E EPS: $0.50, down from $1.31 2002E EPS: $0.97, down from $1.78 Downgraded to Market Perfomer from Long-Term Attractive Arun Veerappan, Communications Components/Semiconductor Devices “After the close, on March 6th, Broadcom announced that revenue and EPS for Q1:01 (March quarter) would be significantly lower than the company’s original guidance following its Q4:00 earnings conference call,” said Veerappan. “This pre-announcement confirms our belief that business conditions were weak and hence our January 26th downgrade of the company’s stock from Buy to Long-term Attractive. Broadcom’s new guidance ranges from $315 to $325 million in revenue and pro-forma fully diluted EPS of $0.08 to $0.09. This new guidance is significantly below our current estimates of $420.5 million in revenue and $0.30 in EPS. Broadcom attributed the shortfall to widespread weakness in demand across its customer base as well as the termination of a significant contract from one of Broadcom’s top customers, 3Com. The company also cited that it had very low visibility into the forward quarters. In light of the company’s new guidance and poor visibility, we are lowering our estimates. While the stock is down significantly since January 26th, we believe that the company’s fundamentals have deteriorated much more than Broadcom has indicated (i.e., its core business of cable modem and set-top box chips), which could lead to further weakness in the company’s stock. We are therefore continuing to maintain our cautious outlook on the company's stock for the upcoming period and are further reducing our rating on Broadcom stock from LTA to Market Performer.” Jack