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Technology Stocks : Applied Materials No-Politics Thread (AMAT) -- Ignore unavailable to you. Want to Upgrade?

To: Proud_Infidel who wrote (7087)	9/8/2003 10:34:51 AM
From: Proud_Infidel	Read Replies (2) \| Respond to of 25522

Lehman: Best Q3 Since 1999, Recovery Under Way Online staff -- Electronic News, 9/5/2003 Further backing industry pendants that claim the recovery has started, Lehman Brothers issued a bullish report on the Semiconductor Industry Association's (SIA) July numbers, which showed an 11 percent year-over-year growth in revenue. Overall Lehman reported that the semiconductor industry's struggle is coming to a close and the current quarter will help lead the market into a revenue driven 2004. "In general, we believe the semi end-markets are continuing to improve with PC starting last summer, wireless starting this summer and telecom joining in next year," Dan Niles, an analyst with the research firm, said in the report. Lehman said it believes the pickup began last summer, but demand in the first half of 2003 was stifled by the Iraq war in Q1 and SARS in Q2. As Q3 momentum continues to build, Lehman said improvements will show up in the mid-quarter calls of several semiconductor companies. "As we have stated before, we believe that Q3 is the first normal quarter in the last nine months and the best Q3 since 1999 which kept us bullish entering the summer," Niles said. "Importantly, we believe there is momentum going into Q4 due to the improving corporate profit environment driving increased IT spending and a continuation of solid consumer spending." For one, Intel Corp. last week upped its Q3 estimates. The MPU kingpin late Thursday confirmed its revised guidance, expecting between $7.6 billion and $7.8 billion in Q3 revenue and inching up its gross margin to around 56 percent on increased volume. "We note that [SIA's MPU] ASPs increased 11 percent month-over-month from $69.78 to $77.45 as Intel has recently experienced strength across its microprocessor business," Niles said. "We believe the majority of this upside is driven from higher unit volumes as shown by the higher gross margin guidance due to higher capacity utilization. That being said, we believe that the PC industry is currently working through the beginning of a PC corporate upgrade cycle as we approach the Microsoft's end-of-life support for Win 98 in January of 2004. Going forward, we believe industry PC units could be up in the high single digits, which are higher than our original forecast of up mid-single digits." Lehman is sticking by its current worldwide semiconductor revenue forecast at up 10 percent year-over-year for 2003, and continues to believe 2004 should be a bit better than 2003 with a full year of normal economic growth as the driver. "As we have mentioned in prior notes, we believe that IT spending is driven by improvement in corporate profits," Niles said. "Going forward, we continue to believe that corporate profits will continue to drive IT spending as the year progresses.