Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Return to Sender who wrote (9452)	4/15/2003 10:54:04 PM
From: Return to Sender	Respond to of 95546

Semiconductor Equipment . . . Novellus was cut to In-Line from Outperform at Goldman Sachs. The firm says it is left with too many unanswered questions to maintain its positive view on NVLS. Goldman notes that its checks indicate that NVLS is likely seeing a more pronounced impact from SARS than its competitors. Novellus reported 1st quarter $0.08 on $238 million (+10% Quarter/Quarter). No surprises. 1st quarter orders $244 million. Lowered 2nd quarter guidance - orders $188 million (-23%), $215 million shipments, EPS of $0.05 on $238 million. The company blamed Iraq/SARS for significantly weaker orders the past 3 weeks. Lower 2003 from $0.49 on $1.01 billion to $0.31 on $966 million. The firm lowered 2004 from $1.15 to $1. Despite the disappointing outlook, downside limited vs. historic troughs of 1.8xBV. NVLS is at 2x BV, a discount to AMAT (2.8x), KLAC (3.4x) and LRCX (2.3x). Cognex (maker of machine vision technology) reported first-quarter earnings of $1.8 million, or 4 cents per share, meeting Wall Street's consensus estimate. Revenue soared 51 percent in the latest three months to $32.9 million from $21.8 million in the same period a year earlier. Looking ahead, Cognex sees earnings of 5 to 7 cents per share in the second quarter with revenue ranging from $34 million to $37 million. This outlook surrounds the current average estimate for a profit of 6 cents per share in the June period. Cognex was upped to Buy at Needham following earnings. The upgrade from Hold follows the recent 19% pullback in stock over the last two weeks and signs that the recovery in its business is continuing. Price target $24. Electro Scientific placed CEO James T. Dooley on administrative leave of absence pending the results of an ongoing review of the Company's financial statements for fiscal 2003. As announced March 20, company is conducting a review primarily focused on financial statements for fiscal 2003, and the company intends to restate its financial statements for the quarters ended Aug 2002, and Nov 2002 as a result of the review. ESIO is revising estimates provided March 20. Semiconductors . . . The San Jose Mercury News reports Intel made an announcement to halt shipments of its new ultra fast Pentium 4 chips in light of an "anomaly" discovered by its validation team in a small number of chips over the weekend. Xilinx announced complete 3rd party IP Support for new Spartan-3 platform FPGAs. Spartan-3 is another key product family targeting consumer, industrial, and automotive markets. While the introduction of hardware and tools is clearly positive, it will likely be several quarters before revenue reaches a meaningful level. M-Systems (flash-based data storage technology) reported a first-quarter loss of $700,000, or 2 cents per share, better than its year-ago equivalent loss of $2.3 million, or 8 cents per share, and narrower than Wall Street's consensus view for a loss of 6 cents per share. Revenue rose 93 percent in the latest three months to $22.1 million from $11.4 million in the same period a year earlier. The company added that it beat its own internal loss and sales expectations for the period, and that its Mobile DiskOnChip product is being designed into more cell phones and personal digital assistants. Boxmakers . . . Hewlett-Packard downgraded by Merrill Lynch to Neutral from Buy. The firm is saying they are concerned the stock could be a value trap. The firm is concerned about the company's dependence on hardware revenue (IBM's hardware results weren't encouraging), the printer business isn't likely to get better, and HPQ is being squeezed between IBM and Dell and time is not on their side. In addition, with merger synergies increasingly behind the co, the cost cutting story is becoming stale and the focus will increasingly turn to share gain/loss. More on the Merrill downgrade of Hewlett . . . Taiwan sources report that Hon Hai and Asustek refused to take low-priced motherboard orders from HP. HP then offered the contracts to Korean suppliers Winstron and Lite-on. Since the merger, HP has been a price aggressor in its supply chain. Using supplier consolidation and e-bidding, the company has wrung out significant cost savings in the past year. Refusal of motherboard orders is one of the first signs these savings may moderate and that operating leverage from this source is beginning to max out. This cost cutting story is beginning to lose steam and that share gains increasingly will be the topic of focus for investors. Apparently commercial motherboard orders are being quoted at US $22 without chipsets, which appears too low as even Hon Hai, well known as the lowest-price taker, is unwilling to accept the order. There is now a chance the motherboard industry will push back in relative unison, forcing HP to reset prices to more sustainable levels. As a result, there exists some potential that HP could experience a delay in rolling out computers that utilize the latest 865 chipset from Intel. HP's stock continues to appear inexpensive but we worry HP could be a value trap. 2020insight.com