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

To: Return to Sender who wrote (9225)	4/1/2003 7:36:22 PM
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From Briefing.com: Updated: 02-Apr-03 - General Commentary - Sector shrugged off some negative news and edged higher in what could best be described as a lackluster session. Among the bearish developments were negative research reports on IBM, Sun Microsystems, Intel, Broadcom, RF Micro Devices and Yahoo!; weakest ISM reading (46.2) since November 2001; and no change on the war front. However, none of the news was really new. Indications that IT spending remains soft certainly doesn't come as a shock; softness in the manufacturing sector was telegraphed by weak regional reports; and market has been adjusting its expectations on the duration of the Iraqi war for the last several days. So while the news cycle was predominately bearish, it's clear from the market's/sector's behavior that it has priced in much of the negatives. Ability to shrug off bad news, combined with fact that support at 1335 held, provided traders a reason to step up and do some light buying. but mediocre volume and breadth figures reveal that bulls lacked conviction. Who can blame them given the uncertainties of war and the steady diet of disappointing economic news. Only good news (aside from support holding) is that preannouncement season has been relatively tame. Haven't experienced the kind of big shocks that were trademarks of the past several quarters. Also very likely that investors will discount slightly disappointing earnings reports due to temporary war pressures. Unfortunately, Briefing.com also sees very little upside come earnings season (which begins late next week) as companies likely to remain cautious in their outlooks given uncertain geopolitical/economic environments. Basically, sector is spinning its wheels. Additional upside predicated on a swift and positive resolution to the Gulf War that will unleash wave of pent up corporate spending; while downside risk increases on technical break of support at 1335 and/or more bad economic news which will squash hopes for second half earnings turnaround. Robert Walberg, Briefing.com In earnings developments, Asyst Technologies (ASYT 4.62 -0.43), a chip equipment company, announced that it expects to report consolidated net sales for fiscal Q4 (Mar) of approximately $57 mln, versus prior guidance of $70-72 mln, on account of two orders for 200mm SMIF upgrade projects being delayed until later in the year. 4:22PM Asyst guides Q4 lower (ASYT) 5.05 -0.37: Co. expects to report Q4 consolidated net sales of "approximately $57 million, versus updated previous guidance of $70-$72 million, a shortfall of approximately 19%." Multex consensus est is for revs of $70.8 mln. 11:31AM ISM Review : The March ISM manufacturing index fell below a neutral reading back to contraction after four months above water. The 46.2 level is the weakest since the economic recession in Nov 2001 and well below expectations. Low levels for both new orders (46.2) and production (46.3) reflect weaker underlying fundamentals in a sector which still hasn't found a sustained lift from the recession. While the ISM spokesman focused on the effect of war anticipation in explaining the March drop, Briefing believes that weak demand is equally to blame. While next month's report will clear the question of war anticipation versus the actual event, the drag from flat business investment growth is expected to lighten only modestly. The March data (and Chicago PMI) also include the sharply reduced auto production plans announced a month ago which may improve given the increased incentives for April (GMs 0% financing for 5 years). The new orders and production components which provide 55% of the weight fell to the lowest levels since Oct '01. Employment fell to 42.1 as manufacturing payrolls have shown 31 consecutive months of decline and a total of 2.1 mln fewer workers. Disturbing to the bottom line was the high 70 level for prices paid. High input costs (largely energy) contrast with the lack of pricing power which squeezes profit margins. The bottom line is a worsened outlook for the vast manufacturing sector and more specifically those focused on capital equipment. Resilient consumer demand and defense orders have provided a weakening crutch as the lack of business investment growth leaves the industries providing those goods with weak demand, weak profits and a continued outflow of employees as excesses leave the manufacturing sector using less than 3/4 of its production capacity. By itself, we do not expect the weakened manufacturing sector to pull the trigger for another Fed ease. But with a decline in March payrolls of even half the 308K size in February the odds are strong that the Fed will ease before the May 6 FOMC meeting.-- Tim Rogers, Briefing.com 11:20AM Marvell's Q1 appears to be tracking nicely -- Legg Mason (MRVL) 21.14 -0.05: Legg Mason believes the progress to date points to an upside quarter for MRVL. Firm sees sequential revenue growth potentially exceeding 7-9% guidance. Believes it is now likely that MRVL reports revs exceeding $165 mln and EPS of at least $0.18 (Multex consensus $162.3 mln and $0.17). Firm reiterates its Buy rating and $30 target. 9:31AM Silicon Labs started with Mkt Underperform at Piper; target $22 (SLAB) 26.19 +0.04: USB Piper Jaffray believes that co's lack of diversification represents an inherent risk to its overall business model. Believes the room for error to be relatively non-existent. 9:28AM Nasdaq technical levels : -- Technical -- From current levels, look for initial support in the range of 1335 to 1341 which could be characterized as a much stronger floor than your typical trading level. That area is closely followed by straight-line support at 1330, and another level at 1320. To the upside, the index will face initial resistance in the range of 1347 to 1350, followed by more significant overhead at 1358 to 1362. 9:03AM Sun Microsystems estimates may be at risk - JP Morgan (SUNW) 3.26: JP Morgan maintains their Underweight rating; although they believe SUNW should meet their Q3 ests on April 16, given the deteriorating demand environment they think their June qtr ests may be at risk; in addition, firm believes that closing the qtr likely was more difficult than anticipated, and that SUNW's business encountered further competitive encroachment from IBM and HPQ in addition to a continued industry shift to industry standard servers; finally, shares trade at 60x CY03 est, which is in stark contrast to the difficult near- and long-term challenges facing the co. 8:50AM Foundry Ntwks revs are tracking, but stock expensive --UBS (FDRY) 8.04: Channel checks by UBS indicate that co is on track to possibly exceed firm's $84 mln revenue est (Multex consensus $85.07 mln). However, firm is maintaining its Reduce rating and $6 price target as stock remains excessively expensive at 25x firm's 2004 est while Cisco trades at 20x. 8:39AM IBM estimates may be aggressive - JP Morgan (IBM) 78.43: JP Morgan says that IBM's results on April 14 will likely be pressured by the industrywide deterioration of enterprise demand in late March, although the co's competitive advantage should allow it to partly counter the industry weakness with mkt share gains; firm expects IBM to report Q1 EPS of $0.78 on revs of $19.6 bln, slightly below consensus of $0.79 and $19.9 bln, and continues to believe 2003 consensus of $4.32 and $87.9 bln remains aggressive (firm's ests are $4.23 and $86.7 bln). 8:18AM Cree lands $100 mln deal (CREE) 18.52: Co. announces Sumitomo Corp has agreed to purchase approximately $100 mln of Cree's light emitting diode (LEDs) products through Cree's fiscal year ending June 2004 subject to end customer demand. 8:07AM RF Micro Device downgraded at Thomas Weisel (RFMD) 6.01: Thomas Weisel downgrades to Attractive from Buy, saying they do not believe that multiples can materially expand from these levels, even with potential rev upside, before investors have more faith in bottom line improvement. 8:03AM Broadcom downgraded at Thomas Weisel (BRCM) 12.31: Thomas Weisel downgrades to Attractive from Buy based on: 1) ongoing uncertainty regarding mgmt, 2) the future direction of BRCM's most profitable division, ServerWorks, 3) potential weakness in enterprise mkts because of reduced IT spending, 4) potential softness in cable and set-top mkts, and 5) valuation. 7:41AM Intel: Q2 rev seasonality still a concern - Lehman (INTC) 16.28: Lehman says that taking some profits in INTC may be the right course of action heading into earnings for short-term investors; although firm believes Q1 results are in-line with expectations, June qtr rev guidance is likely to be down 2-3% QoQ at the midpoint vs current consensus of down 0.6%; firm also notes that EPS expectations are flat QoQ for June vs the +$0.01 earlier in the qtr, but this may also be too high. Maintains Overweight rating and $24 price target. finance.yahoo.com^SOXX+ALTR+AMAT+AMD+ASYT+BRCM+CREE+FDRY+IBM+INTC+KLAC+LLTC+LSCC+LSI+MOT+MRVL+MU+MXIM+NSM+NVLS+RFMD+SLAB+SUNW+TER+TXN+XLNX+^IXIC+^NDX+^SPX+^VIX+^VXN+^STI.N+^STI.O+SMH&d=t RtS

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