More from Briefing.com: 6:09PM Hewlett-Packard (HPQ) 14.09 -0.76: HP is ticking higher after the bell as it reports results in line with the Multex consensus. The company also affirms Q4 (Oct) consensus of $0.22/$17.4 bln. The good news was that the company did not warn as many had expected. Rather than analyzing HP's in-line quarter, let's take a look at the company as a potential investment now that it's a newly combined company. In fact, this is the first quarter since the combination. The integration with Compaq appears on track in terms of cost reductions and the company expects to see the full result of this in OctQ. Of note, HP said it cut 4,740 employees from the work force and was on track to cut 10,000 by the end of fiscal 2002... The company's forward calendar p/e of 12x vs an average of 17x for its peer group is attractive. However, the company is suffering from sluggish demand, an aggressive competitive environment, and remaining integration issues. Enterprise IT spending is not showing any improvement and PC channel inventories are still too full. HPQ is also suffering market share losses. According to Gartner, IBM has widened its market share lead to 29.6% in a shrinking server market. Sun and Dell have also increased its share while HPQ has slipped to 24.7% from 27.4%. There's just not a lot to get excited about HPQ. The combination with Compaq is not all that compelling. Essentially, HPQ stepped up its presence in a market that is nearly plateaued and in the midst of continued price wars. HP's printer business had been showing some promise pre-merger. The idea was to benefit from top and bottom line synergies with a major PC and server maker. Q4 should be a better gauge for the success the newly married couple will have, but we're not optimistic.-- Robert J. Reid, Briefing.com
6:03PM Tuesday After Hours price changes vs 4pm ET levels: Dow component, Hewlett-Packard (HPQ 14.55 +0.34), reported a fiscal Q3 pro-forma profit of $0.14 per share, in line with the Multex consensus. Revenues dropped 11% to $16.536 bln, which was shy of the consensus estimate of $16.823 bln; however, HPQ helped its cause by affirming the Q4 consensus sales and earnings estimates of $17.4 bln and $0.22 per share on a pro-forma basis, respectively; related stocks include the likes of DELL, IBM, GTW, APPL, AMD and INTC... Finally, semiconductor company, Semtech (SMTC 16.40 -2.52), posted an in-line Q2 profit of $0.14 per share, but said it expects Q3 EPS of $0.14 and revenues to increase 13-19% (about $49.5-$52.1 mln), which is a bit shy of the current Multex consensus estimates of $0.15 and $54.8 mln; competitors include TXN, ADI, NSM, LLTC, MXIM, FCS and ISIL
5:24PM Hewlett-Packard (HPQ) 14.21 -0.64: -- Update -- On its conference call, the company again affirms guidance for Q4 (Oct), however, conditions point to continued weak IT spending. Buying cycles are lengthening. The company's workforce reduction is on track. Not much new on the call that's not in the press release... stock at 14.60.
4:04PM Hewlett-Packard makes qtr on light revs; affirms Q4 outlook (HPQ) 14.21 -0.64: Reports Q3 net of $0.14 a share, in line with the Multex consensus. Revs declined 11% to $16.536 bln (consensus $16.823 bln). HPQ affirms Q4 consensus of $0.22/$17.4 bln.
4:46PM Semtech in discussions to resolve faulty IC dispute (SMTC) 18.92 -0.98: -- Update -- Announces that it is in discussions with a customer to resolve a dispute over whether an SMTC integrated circuit caused failures in some units of two models of the customer's products; the customer has indicated that it has suffered damages in the range of $42 mln and has projected that they may exceed $115 mln; the customer, which is expected to account for about 1% of sales in Q3, purchased about $550,000 of the IC at issue.
4:40PM Semtech reports in line Q2, guides below consensus (SMTC) 18.92 -0.98: -- Update -- Reports Q2 EPS of $0.14, in line with the Multex consensus; revs were $52.1 mln, vs consensus of $51.7 mln. Co expects Q3 EPS of $0.14 and revs to rise 13-19% (about $49.5-$52.1 mln), vs consensus of $0.15 and $54.8 mln.
1:56PM Chart Watch : The impressive recovery off of the July low in the key semiconductor sector (SOX at 321) of roughly 30% certainly was welcome as this group is often considered the leader for the entire tech arena. However, the action from a technical perspective for this index and a number of components of late has raised warning flags.
The chart of the index shows that it put together two strong advances this month. The first initially held near its 20 day ema (blue line) and the second was stymied right at its 50 day ema (purple line). A slide after such an impressive run is not unusual but the decline has been on the aggressive side with the 20 day ema providing solid resistance over the last two days. Thus far today the index has held near a chart barrier in the 320/319.50 area but will need to see a recovery back through 325 and 327 to improve the shorter term tone. The 20 day ema (at 336) needs to be taken neutralize the negative bias of the last week. A failure raises the probability that the entire recovery was merely part of a temporary correction. Within the group INTC has broken down after failing at its 50 day ema and two month range top, KLAC came within $0.45 of hitting its early August low while NVLS has declined aggressively over the last week after it failed at its 50 day ema. -- Jim Schroeder, Briefing.com
8:59AM Durable Orders : We argued strenuously after a series of weaker than expected economic reports in late July/early August that the market was not viewing those reports rationally. In some cases, the reports were weaker than expected but still consistent with economic recovery. In other cases such as Durable Orders, the numbers were weak but represented just one month in a volatile series. We wrote back then about orders that "given the tremendous volatility in this series, it is far more likely that this reading was an aberration than the beginning of a renewed downtrend in business investment." While the CNBC anchor can't stop saying how shocking today's numbers were, the reality is that durables have always been ridiculously volatile on a monthly basis, and that this number, while not predictable, is certainly not shocking. What it tells us is simple: the June decline was an aberration. Since the 9/11 attacks, we have been looking at the durables numbers relative to its post-attack October reading to get a measure of the business investment climate. Prior to June, the good news was that investment was stabilizing and even improving modestly. The June number was worrisome as it wiped out months of small increases and could have indicated a renewed decline was beginning. But with the July rebound, confidence in the recovery is restored. Since October, the best monthly proxy for business investment - nondefense capital order ex-aircraft - is up at a healthy 9.1% annual pace. That's still well off its pre-recession peak, but at least it's pointing to positive investment growth. It's probably hoping for too much, but perhaps this durable orders whipsaw in the past two months will be a lesson to investors never to place too much emphasis on any one economic report. - Greg Jones, Briefing.com
3:18PM Taiwan Semi (TSM) 8.38 -0.47: Stock has slipped over 15% over the past 2 weeks on rumors of price discounting and cancelled vendor orders; stock slips further on Prudential's Q3 and Q4 est cuts. Firm believes TSM's business could be incrementally weaker in the Sept qtr and sees Dec qtr revenues as flat relative to the Sept qtr; adds that NVDA's contribution could fall to under 13% in Q3 from 25-26% in Q2.
1:49PM Altera (ALTR) 11.55 -0.81: Analysts expect ALTR's mid-qtr update tonight to be a non-event; believe mgmt will maintain revenue guidance of +0-2% q/q. SG Cowen's channel checks indicate co is on track to achieve their $0.06 and $183 mln forecasts; notes Sept is a critical month as July and Aug are seasonally slow. Firm continues to believe PLD growth to outpace that of the overall semi industry and maintains their Buy rating .. Bear Stearns also expects guidance to remain intact.
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