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Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED -- Ignore unavailable to you. Want to Upgrade?

To: stockman_scott who wrote (33283)	3/13/2001 4:11:53 PM
From: im a survivor	Respond to of 65232

Atmel Keeps Growing Despite Industry Slump Dow Theory Forecasts March 13, 2001 Recent Price $12 Dividend none Yield none P/E Ratio 21 Shares (Millions) 495.9 Long-Term Debt as % of Capital 24.2% 52-Week Price Range $30.69 - $9.38 Semiconductor maker Atmel has continued to report strong sales and profit growth despite market worries about slumping technology markets, and the company is expected to keep growing strongly through at least the next two years. The consensus estimate is for per-share profits to climb about 47% in 2001 to $0.81 and another 11% in 2002 to $0.90. The stock, down more than 60% from its March 2000 high, trades for a reasonable 15 times the 2001 estimate. Atmel is a Focus List "buy." December-quarter results were particularly impressive in light of shortfalls reported by some other chipmakers. Atmel’s earnings per share jumped to $0.18 from $0.08, matching the consensus estimate after topping expectations in each of the previous four quarters. Revenue climbed 48% year-over-year and 8% on a sequential-quarter basis to $574 million despite weakening demand from cell- phone handset makers. Continued capacity expansion, cost controls, a relative lack of pricing pressure, and solid demand from many end-use markets helped bolster results. The flash-memory and microcontrollers and logic segments were the most important contributors to sales growth. Sales of flash-memory chips (26% of December-quarter sales) rose 4% on a sequential-quarter basis amid solid consumer demand for set-top cable boxes, hard-disk drives, global positioning systems, digital cameras, and cell phones. Microcontrollers and logic product sales (23%) climbed 19% amid strong demand for microcontrollers and about 50% higher sales of smart card integrated-circuits. Atmel expects smart-card revenue to roughly triple in 2001 to $300 million, helped by widening use of the chips in such areas as secure Internet and e-commerce applications, banking and healthcare cards, and cell phones using the GSM communications protocol. Other segments also fared well. Sales of application-specific integrated circuits (22%) rose 8% sequentially amid demand from the wireless local area network, digital camera, digital video disk, and radio-frequency markets. Other nonvolatile memory chip sales (21%) rose 3% on stronger pricing for EEPROMs (electrically erasable programmable read-only memories). Sales of industrial, military, and automotive products (8%) rose 18%. On March 7, Atmel said it expects March-quarter revenue to fall about 5% from the December quarter, which would translate into 27% year-to-year growth. Management’s visibility for March-quarter results is high, with order backlog accounting for about 90% of expected revenue. Unlike many of its peers, Atmel has not drastically reduced its March-quarter profit guidance. Going forward, results should benefit from the rollout of next-generation cellular phones and from continued strong demand for such products as smart cards, microcontrollers, and flash memories. Also, Atmel is one of the few firms already able to offer all the components for Bluetooth wireless networking, a market with huge five-year growth potential. With the stock trading at a reasonable valuation and growth continuing at a solid clip, Atmel could put on points in a hurry when sentiment shifts toward the semiconductor industry. An annual report for Atmel (ATML) is available at 2325