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

To: Donald Wennerstrom who wrote (11791)	9/24/2003 5:23:43 PM
From: Return to Sender	Read Replies (1) \| Respond to of 95530

Semiconductor Equipment . . . Newport guides below consensus for 3rd quarter (September) and now sees a loss of $0.05-0.08 on revenues of $31-33 million, consensus $37 million. Previous guidance called for earnings of a loss of $0.02 to a $0.02 profit and revenues of $36-39 million. NEWP cites three reasons for shortfall: 1) company's largest original equip manufacturer delayed launch of product for which NEWP provides product design and engineering collaboration; 2) delays in orders from back-end semiconductor customers; and 3) "Lower- than-expected orders from one of the company's largest front-end semiconductor customers, which were expected to be booked and shipped during the third quarter, caused an additional $1.5 million reduction in sales and orders for the quarter". Semiconductors . . . ESS Tech sees 3rd quarter revenue of $44-$48 million versus earlier guidance of $37-$41 million and consensus of $38.4 million. The company expects to report pro forma, or non-GAAP, earnings of $(0.03)-$0.02 versus previous guidance of $(0.08)-$(0.03) and consensus of $(0.06). Powerwave downgraded at Piper Jaffray to Underperform from Market Perform based on valuation as well as fierce competition from competitors Remec and Andrew Corp, pricing pressure, and the likelihood that Nortel plans to take back some of its power amplifier business with the development of its own power amps's. Target is $7. SoundView comments that Transmeta's Best Choice award at Computex for mobile products (based on Crusoe processor) is quite amazing given the big thrust Intel is making with Centrino. Last week, Transmeta also announced teaming with Nvidia, a significant announcement in firm's view. Consistent with out valuation/price targets for other stocks in firm's universe, SoundView arrives at a 12-month tgt of $5 (using 2005 estimates). Soundview making comments this morning on AMD in light of its Athlon64 launch yesterday and raises price target to $15 from $13. Firm believes Microsoft's launch of the Windows XP 64-bit edition should create an interesting dynamic due to Intel not having a solution for a mainstream Microsoft product in 2004 which leaves AMD with an edge in high-end desktops. In addition, the analyst believes the shares should continue to outperform through the end of year on Athlon64 buzz and improving fundamentals in Flash memories. Advanced Micro officially launched the Athlon 64. Three versions of the processor were announced, ranging in price from $278 to $733. Microsoft, as expected, also announced the release of a beta version of Windows XP 64-Bit Edition. The commercial version of the OS is expected to be available in 1st half 2004, until which time we believe the value proposition of Athlon 64 will remain significantly limited. Expect shipments to remain minimal in the near-term and limited to hard-core PC gamers and digital media content creators. The majority of design wins are in the system builder market; OEMs that have announced products based on Athlon-64 include: HP, Fujitsu-Siemens, Futjitsu, and Packard Bell. On the notebook front, design wins are limited currently to the European and North American markets. AMD is touting the Athlon 64's ability to run both 32-bit and 64-bit applications for the mainstream PC market as surpassing Intel's offerings. Do not view Athlon 64 as a threat to Intel and believe it can easily push its way in and negate AMD's first mover advantage when it decides to enter. Intel has said it is not worried about Athlon 64 due to the lack of application software support. The Athlon 64 should allow AMD to regain some share next year as it will have the 64-bit field to itself for sometime, and because it's a 32-bit refresh; we forecast CPU revenue growth of 27% in 2004. AMD's share gain would also be +ve for chipset suppliers NVIDIA, VIA, SIS and ATI-Tech, as AMD relies on third-party chipset support, as opposed to Intel which makes 70% of the chipsets for its platform. Most analysts will prefer to see traction with the Athlon 64 before they turn more positive on the stock. Additionally, AMD faces overall near-term risk due to two trends currently facing the PC market which are working against the company: (1) secular shift from desktops to notebooks, (2) shrinking portion of the white box market. Boxmakers . . . The Wall Street Journal reports Hewlett-Packard, which has been a larger backer of the Linux operating system, plans to indemnify its Linux customers against any potential legal actions by SCO Systems. Dell won a contract worth up to $500 million to provide computing technology to the U.S. Army. The contract was issued under the army's Information Technology Enterprise Solutions procurement contract, and allows army organizations to buy commercial servers, desktop computers, storage devices and other hardware and software from Dell. robblack.com Gee Don, didn't I say this would be a down week? So how come I went long today? On the bright side the we got way oversold on a short term basis today. On the negative the market did it with fairly heavy volume. This includes most of our favorite stocks. There have been no real big earnings warnings to speak of but it's still September and we have so much bullish sentiment that even I bought into it. Gee we should have known the market would cave in as soon as that happened! ;-O RtS