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

To: Return to Sender who wrote (9096)	3/20/2003 5:58:20 PM
From: Return to Sender	Respond to of 95541

EMS . . . Plexus warned that fiscal second-quarter losses would be wider than expected due to continued weakness in all of its end markets. The provider of engineering and product development services now expects to lose 10 to 12 cents a share in the quarter ending March, versus prior forecasts of a loss of 2 to 5 cents a share. Revenue is expected to be $190 million. In late January, the company had projected revenue to be $190 million to $200 million. Jabil reported 2nd quarter cash EPS of $0.16, in line with consensus estimate and $0.01 ahead of our estimate due to better than expected opex leverage, despite weaker GM. GAAP EPS was $0.05 due to $21 million in one-time charges in the Quarter. 2nd quarter revenues of $1.15 billion was in line with estimate as incremental rev. contribution from Philips acquisitions and new storage related rev. offset Quarter/Quarter revenue declines in the telecom, peripherals, automotive and instr./medical segments. GM of 9.2% increased 10bps Quarter/Quarter while cash OM remained flat as cost cutting and improved cost absorption were offset by a 10bps Quarter/Quarter increase in SGA. The cash balance declined by $41 million to $497 million as the cash conv. cycle increased 2 days to 38 (increases in inventories and receivables) and the company paid down $50 million on its revolving credit facility. Mgmt continues to expect $60-80mm in restructuring charges in 2003. The 3rd quarter outlook was largely in-line with exp. although mgmt did indicate seeing a recent slowing of demand trends due to war concerns. Analysts are raising 3r quarter cash EPS to $0.18 from $0.17 to reflect the reduction in tax rate to 16% from 18%. 2004 cash EPS remains unchanged at $0.80. Semiconductor Equipment . . . Chief Executive Jim Morgan of Applied Materials said the chip industry is not about to enter a commoditization-type of "cola war." "We will see a massive proliferation of diverse chips for a growing amount of diverse uses," he said during the company's annual shareholder meeting. Raj Seth at SG Cowen raised his ratings on chip equipment makers Applied Materials, KLA-Tencor and Novellus Systems to "outperform" from "market perform," citing "meaningfully improved" reward versus risk profiles since the beginning of the year. SG Cowen cited the following reasons: 1) believes we're in the midst of a gradual cyclical recovery, and there is continued evidence that IT spending and semis are gradually improving; 2) expects improvement in 2H03 driven by incremental 300mm spending by IDMs and a resumption of orders from TSMC; 3) capacity models suggest a strong 2004 recovery; 4) concerns over declining memory orders/pushouts appear priced in; and 5) valuations attractive for longer term investors. He said that information technology spending in the semiconductor industry is gradually improving, and expects an even stronger rebound in 2004. "We think current prices represent attractive entry points for investors with horizons of 9 to 12 months," Seth said. Semiconductors . . . W.R. Hambrecht believes Sandisk should benefit from NAND flash penetrating cell phone market in the form of embedded memory or memory cards. 2020insight.com