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

To: stockman_scott who wrote (39093)	7/16/2001 7:39:52 PM
From: Sully-	Read Replies (2) \| Respond to of 65232

19:23 ET ****** Novellus Systems (NVLS) 44.30 -2.07: This chip equipment maker deserves some credit for meeting the Q2 earnings guidance of $0.40 per share it provided in a mid-quarter update on May 31. As it turned out, that result was actually a penny ahead of the consensus estimate. That, alone, is an impressive feat given that so many other companies have had to lower their guidance-- sometimes more than once. Heck, NVLS even confirmed earnings guidance for Q3, saying it expects to post a profit of $0.24 per share (in line with current consensus). Had the company's bottom-line performance been the only consideration for the market, NVLS would probably be trading sharply higher in after hours activity, but alas, the market needed to hear more from NVLS-- specifically, it needed to hear that business was picking up and that visibility had improved. On those fronts, NVLS's guidance wasn't so impressive. Accordingly, its stock, and the stocks of related companies like AMAT, KLAC, LRCX and INTC have traded lower in the after hours session. Granted, NVLS did say it was seeing strong interest in its advanced technology products; however, that positive assertion was overshadowed by an admission that industry conditions are really murky right now and that it is tough to say if a bottom has been reached. Earlier in the day, AMAT's CFO made similarly cautious comments at the Semicon West trade show. Such comments, at the very least, should force investors to consider the idea that a rebound in end demand may not occur until sometime next year. That will be a hard thing to do for some, because it is hard to believe, given how bad things are now, that current conditions could persist for another 6-12 months before there is any notable pickup in demand. With Intel due to report its earnings results after the close tomorrow, that unsettling thought has the chip-related stocks on some shaky ground right now. Intel, of course, could provide support in a hurry with some upbeat guidance, but for now, confidence in that outcome is lacking as NVLS, and others, haven't given investors much reason to believe the industry outlook is going to improve markedly anytime soon. -- Patrick J. O'Hare, Briefing.com Ö¿Ö