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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: michael97123 who wrote (65896)	9/13/2002 1:19:21 PM
From: Jacob Snyder	Read Replies (1) \| Respond to of 70976

Philips Bad News Follows Taiwan Semi By CHINITA L. ANDERSON Of DOW JONES NEWSWIRES NEW YORK -- Shares of semiconductor companies fell Thursday after Dutch conglomerate Royal Philips Electronics NV (PHG) slashed third-quarter sales forecasts of its semiconductor unit, offering further evidence that chip sales will remain weak. This is "another negative data point which is putting a damper on any upside surprise that we thought we'd see in the fourth quarter," said A.G. Edwards & Sons analyst Chris Chaney. Philips news follows a depressed forecast by the world's largest contract chipmaker Taiwan Semiconductor Manufacturing Co. Ltd. (TSM) earlier this week. Adding to the pressure is U.S. Bancorp Piper Jaffray's bearish stance on semiconductor supplier companies. Philips stock lost 7.5% to $17.07 in U.S. trading. Shares of Taiwan Semiconductor Manufacturing recently shed 4.8% to $7.76. Also losing ground is bellwether Intel Corp. (INTC) which dropped 4.7%. Applied Materials Inc. (AMAT) shed 5%. Texas Instruments Inc. (TXN) fell 6.2% Philips said Thursday it expects third quarter semiconductor sales to decrease 4% to 6% in U.S. terms, compared to the second quarter. Philips is the third largest producer of semiconductors in Europe. The consumer electronics powerhouse also said it will take additional measures to return the semiconductor unit to profitability, which will likely result in exceptional charges of EUR200 million to EUR225 million. Wall Street watchers were surprised by the company's news. "We are surprised by the magnitude of the revision," wrote SG Cowen analyst Marisa Baldo in Thursday research comments. Philips announcement came on the heels of Taiwan Semiconductor Manufacturing news late Tuesday that it would cut in half production targets for its state-of-the-art wafer plant to 5,000 wafers a month by year-end. The Taiwanese foundry blamed sluggish demand for advanced chips amid a weakening outlook for global electronics sales as the reason behind its decision. Chaney said Taiwan Semiconductor's news confirmed some Wall Street watchers fears that end-user demand wouldn't be robust by the year-end. Meanwhile, Applied Materials, KLA-Tencor Corp. (KLAC), and Teradyne Inc. (TER) received an additional blow as U.S. Bancorp analyst Gregory Konezny reduced his revenue forecasts on the companies. Konezny cited lower expectations for autumn orders as well as further evidence of a capital spending slowdown for the remainder of 2002 as the reasons behind his revenue cut for Applied Materials and KLA-Tencor Corp. KLA-Tencor stock shed 4.3% to $31.99, while Teradyne shares dropped 6.6% to $12.50. U.S. Bancorp now sees Applied Materials bringing in $5.03 billion, compared to a previous estimate of $5.08 billion for fiscal 2002. The brokerage firm also expects the company to yield revenue of $5.81 billion, down from a previous projection of $6.27 billion for fiscal 2003. KLA-Tencor is expecting to garner revenue of $1.46 billion, a decline from $1.57 billion for its fiscal 2003, according to U.S. Bancorp. Konezny also lowered his 12-month price target to $37.50 from $50. Teradyne revenue projects were cut due to further evidence of a capital spending slowdown for the rest of 2002, said Konezny. U.S. Bancorp expects the Boston company to bring in revenue of $1.41 billion, down from previous estimates of $1.54 billion for 2003. Konezny also lowered his 12-month price target to $16 from $24. Chaney covers Intel, Applied Materials, Teradyne and KLA-Tencor for A.G. Edwards. He doesn't own any shares of the three stocks, nor does A.G. Edwards & Sons have relationships with the companies. Konezny doesn't own any shares of Applied Materials, Teradyne and KLA-Tencor according to U.S. Bancorp Piper Jaffray. U.S. Bancorp Piper Jaffray said it has an investment banking relationship with Teradyne. Also losing ground, Micron Technology Inc. (MU) stock fell 6%. Analog Devices Inc. (ADI) shares slide down 7.2% to $23.84. Novellus Systems Inc. (NVLS) lost 4.6%. -By Chinita L. Anderson, Dow Jones Newswires; 201-938-4513; chinita.anderson@dowjones.com Updated September 12, 2002 3:05 p.m. EDT