From Briefing.com: 5:31PM After Hours Monday Changes vs the 4pm close: A slightly positive bias has been noted in after hours action with activity relatively limited.
Some positive developments were noted in the tech arena as Microchip (MCHP +12.8%), a manufacturer of semiconductor products used in embedded control applications, guided higher for Q2. Now expects to top guidance provided in July due to higher gross margins; EPS expected to be roughly $0.17 (prior guidance $0.16 -- current consensus also $0.16). Now sees Q2 revs in the range of $169-$171 mln vs the consensus of $170.7 mln.
4:35PM Microchip guides earnings higher for Q2 (MCHP) 15.36 -1.59: Company says it expects earnings for Q2 to exceed the guidance provided in the Q1 earnings release issued on July 17, 2002, driven primarily by higher gross margins; EPS are expected to be "approximately 17 cents, exceeding the prior guidance of 16 cents" -- current consensus estimate is for earnings of $0.16 per share. Sees Q2 revs in the range of $169-$171 mln vs the current consensus estimate for revs of $170.7 mln.
Close Dow +67.49 at 8380.18, S&P +1.29 at 891.10, Nasdaq -15.54 at 1275.86: A mixed start to the week for the market averages with the Dow posting a modest gain while the Nasdaq Composite ended on the defensive. The market opened on a generally negative note with tech pacing the way. Negative calls/estimate cuts from the Street and warnings weighed with semiconductor and storage highlighted. Prudential cut estimates on 14 chip companies citing continued weaker seasonal PC trends and wireline communications along with increasing evidence of digital consumer sluggishness. The Banc of America trimmed their numbers on TSM (-3%) and UMC (-5.2%) based on the belief that utilization rates will decline for the next two qtrs largely due to unusual weakness in the consumer electronics segment. Adding the woes in semi was the warning issued by Chartered Semiconductor (CHRT -15.4%). In storage Merrill Lynch raised competitive and IT spending concerns which led to their cutting of Brocade (BRCD -9.3%) estimates. Other tech sectors under pressure included: wireless (-2.9%), telecom (-1.9%), software, (-1.5%) and networking (-4.3%).
1:26PM Brocade slips to new 52-week low (BRCD) 11.47 -0.86: Storage sector name has broken down to a new 52-week low today. Possibly contributing to weakness in the stock is a Merrill Lynch morning note raising concerns about competitive and IT spending issues in the storage sector. Issues led Merrill to trim its FY03 est on BRCD to $0.51 from $0.53, which still leaves firm above the current Multex consensus of $0.50. Based on the new estimate, Merrill believes BRCD has upside potential to the $29 area.
11:13AM Another ugly day in Semis : Semiconductor names again dominating the new 52-week low as group breaks down to its worst levels in almost 4 years. Among the names on the new low list today are MU, BRCM, CY, CHRT, NSM, BRCM, AMD, ATML, AMCC, STM, LLTC, MXIM, MCRL, VSEA, PWAV, IFX, TQNT, UMC, MCHP... Micron (MU 15.98 -0.52) is one of the few names on the list making a new low for the first time this month. Stock falls to its lowest level since June 26.
11:03AM Semiconductor names edge to lowest level since November '98 : -- Technical -- SOX drops to its lowest level since November 1998. Currently trading just over 270, look for initial support at 268 which represents the lower end of its 10-day Bollinger bands. To the upside, watch for initial resistance at 274 followed by subsequent overhead at 278. Sector components contributing to the weakness include: LLTC, ALTR, MXIM, TXN, NSM.
9:28AM Celestica estimates cut by Needham (CLS) 21.60: Needham believes that CLS could be vulnerable over the near-term as 2002-03 consensus rev and cash EPS ests appear too optimistic and valuation appears high in relation to peers; believes that CLS will guide Q4 results below consensus expectations as the traditional IT spending push may not materialize this year from customers such as IBM, SUNW, EMC, and HPQ; cuts 2002 rev/EPS ests to $8.80 bln/$1.10 from $9.00 bln/$1.14 and 2003 to $9.05 bln/$1.20 from $10.50 bln/$1.45.
8:20AM BofA cuts estimates for Taiwan Semi, United Micro : In addition to Pru's semi est cuts (7:43), Banc of America cuts FY02-03 ests for TSM and UMC based on the belief that utilization rates will decline for the next two qtrs largely due to unusual weakness in the consumer electronics segment; cuts TSM FY02 est to $0.24 from $0.26 and FY03 to $0.35 from $0.40, and cuts UMC FY02 to $0.10 from $0.14 and FY03 to $0.17 from $0.23 (FY03 ests well below consensus for both co's).
7:43AM Prudential cuts estimates for select chip co's : Prudential cuts Dec qtr and 2003 ests for ANAD, BRCM, EMKR, LSI, MCHP, PSEM, STM, TUNE, TXN, ATML, EXAR, NVDA, PMCS, and VTSS; firm sees their previous Q4 sequential rev growth forecast of mid-single digits as unlikely, given: 1) continued weaker than seasonal PC trends, 2) continued weak wireline communications, and 3) increasing evidence of digital consumer sluggishness; for 2003, firm now estimates mid-teens growth vs previous assumption of 20%.
10:18AM Technical Levels : In our last review of the Nasdaq, we were looking at the 1,344 level as the most notable near-term overhead. As it turns out, the prior leg higher stalled at an intraday high of 1,347 which matched reasonably well with our expectations. Since topping out at 1,347 the Nasdaq proceeded to finish last week with a close at 1,291. All this brings us to the more pertinent question of where the markets are headed from here.
Note that on a weekly basis, the Nasdaq has flattened substantially in recent weeks. The index lost a mere four points last week, and posted a relatively narrow ten-point loss the week before. So while the markets continue to face unfavorable seasonal dynamics --in the form of the vaunted preannouncement, or warnings season -- the strict technicals definitely leave the door open for a tradeable move higher.
To the upside, look for initial overhead at the index' 20-day exponential moving average at 1,313. That's followed by a more important area in the range of 1,326 to 1,328 which brackets where the index just topped out on a closing basis as well as the index' 50-day simple moving average. Those two levels are followed by another important resistance point between 1,344 to 1,347 -- this is where the late July rally topped out on a closing basis, and also marks the top of the most recent leg higher. If the Nasdaq should clear 1,344 on the close, start looking towards congestion in the range of 1,376 to 1,380 as a likely candidate for subsequent overhead.
To the downside, keep an eye on Nasdaq 1,290 to 1,295 as an important pivot point, followed by notable support in the area of 1,280. If 1,280 should fail on a closing basis, the next notable floor rests at Nasdaq 1,251. -- Mike Ashbaugh, Briefing.com
2:52PM Zoran (ZRAN) 11.09 -0.41: Stock dropped 13% Friday due to ESST's preannouncement on Thursday; SG Cowen defends co against sector concerns. Firm believes ZRAN is on track to meet Q3 guidance of 25%+ q/q revenue growth citing strength from Japanese DVD player OEM and its digital camera business. Cowen notes ZRAN has $7/share in cash and is already profitable ... sees upside potential if co meets Q3 guidance.
1:58PM Semis : Group is weak again today following Prudential's chips cos est cuts (see In-Play for details) and Merrill Lynch's semi est cuts; firm lowers their 2002 and 2003 EPS and revenue ests for PMCS, AMCC, and VTSS based on the most recent negative pre-announcements from communications equip OEMs. Firm believes that OEMs are now consuming components at the same rate that they did in the Jun 98 qtr and puts inventories at 23% above normal levels ... Merrill reiterates their Neutral stance on the sector.
1:38PM Jabil Circuit (JBL) 17.48 -0.41: Wall Street looks for co to post an in-line Q4 when JBL reports this Thurs. Goldman Sachs predicts in-line results (revs of $931 mln & $0.14 EPS) including modest q/q improvement of key operating metrics; expects little impact to shares on their expectation mgmt will not boost guidance. Soundview similarly anticpates JBL to report in-line with previous guidance and for mgmt to be conservative on Q1 guidance. Bear Stearns is more optimistic and expects Q4 to be the first positive y/y comparison for revenue and earnings in 5 qtrs, with the primary revenue drivers the new outsourcing contracts (both OEM divestitures and organic programs).
finance.yahoo.com^SOXX+ALTR+AMAT+AMD+ANAD+ATML+BRCD+BRCM+CHRT+CLS+CY+EMKR+EXAR+IFX+INTC+JBL+KLAC+LLTC+LSCC+LSI+MCHP+MCRL+MOT+MU+MXIM+NSM+NVDA+NVLS+PMCS+PSEM+PWAV+STM+TER+TSM+TQNT+TUNE+TXN+UMC+VSEA+VTSS+XLNX+ZRAN&d=t
RtS |
