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Technology Stocks : Semi Equipment Analysis -- Ignore unavailable to you. Want to Upgrade?

To: StanX Long who wrote (6468)	10/25/2002 2:25:23 AM
From: StanX Long	Read Replies (2) \| Respond to of 95536

Note the bold at the bottom, Stan. Chartered Semi profit in line but warns on fourth quarter By Jennifer Tan Friday October 25, 12:05 PM sg.news.yahoo.com SINGAPORE (Reuters) - Struggling contract chipmaker Chartered Semiconductor Manufacturing trimmed losses in the third quarter, but warned on Friday of slumping revenues for the rest of the year and cut 300 jobs as chip demand stagnates. Singapore-based Chartered, which ranks a distant third behind rivals Taiwan Semiconductor Manufacturing Co (TSMC) and United Microelectronics Corp in the global market for made-to-order chips, also cut its 2002 capital spending plans to $450 million from the already lowered figure of $500 million. "The near-term outlook for the semiconductor industry has weakened since mid-September and the recovery has been delayed," George Thomas, Chartered's chief financial officer, told analysts in a conference call. "Chartered's outlook for the fourth quarter is considerably weaker than projections earlier in the year, driven by both a general delay in the semiconductor market recovery and by a significant decline in our computer segment revenues, where some customers are working through excess inventory." The company, which is 60.5 percent-owned by government holding company Singapore Technologies, expects revenues for the three months ending December 31 to slide 20 percent from the previous quarter, but rise 37 percent from a year ago. It forecast a net loss of about $114-117 million for the fourth quarter, including a one-time charge of about $5 million after the seven percent cut in its global workforce. Loss per American Depositary Share (ADS) is seen at 44-45 cents. The staff retrenchments -- where production staff accounted for 60 percent of the cuts -- would save the company about $8 million annually, it said. Chartered, which raised net proceeds of $612 million from a poorly subscribed rights issue recently, has been the worst performer in the benchmark Straits Times Index in 2002. The stock, which lost over 40 percent of its value in early September after unveiling the deeply discounted rights offering, was down half a cent at S$0.925 on Friday morning. Its ADS closed down six cents at $5.34 on Nasdaq ahead of the results. MORE RED INK TO COME Some analysts said Chartered's poor fourth-quarter outlook suggested the company might continue to bleed red ink into 2004. "We're disappointed by the fact that revenues will be down significantly," said Kim Eng Ong Asia Securities analyst Dharmo Soejanto. "This could mean significant losses in 2003 and the possibility it might still be loss-making in 2004." The company reported a third quarter net loss of $89.4 million, or 56 cents per diluted ADS, which came in at the higher end of its guidance of a net loss of $87 million to $90 million. In the year-ago third quarter, it lost $118.3 million. In contrast to Chartered's seven consecutive quarters of losses, rival TSMC was profitable during the semiconductor sector's record slump in 2001. Amid weak demand from its computer customers, Chartered's third-quarter revenue rose 1.6 percent from the second quarter to $129.5 million and 63 percent from the third quarter of 2001. Average selling prices (ASPs) rose 7.6 percent to $1,157 per wafer in the third quarter from the second quarter, but are seen falling six to eight percentage points in the fourth quarter. Usage of its production capacity fell to 39 percent during the third quarter, from 42 percent in the second quarter, and is seen slumping further to around 35 percent in the December quarter. This is much worse than industry leader TSMC, which enjoyed 79 percent capacity utilisation in the third quarter, but would see a low to mid-50 percent range in the fourth quarter.