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: Donald Wennerstrom who wrote (14345)	4/6/2004 5:36:02 PM
From: Return to Sender	Respond to of 95645

From Briefing.com: From Briefing.com: 4:51PM TranSwitch announces $60 mln mixed shelf registration (TXCC) 2.55 -0.15: 4:28PM TranSwitch guides Q1 revs above consensus (TXCC) 2.55 -0.15: Company now sees Q1 revenues of approx $7.5-8.0 mln, vs the Reuters Research consensus of $6.5 mln and prior guidance of approx $6.5 mln, due to stronger demand across product lines. 4:12PM Seagate Tech guides Q3 below consensus (STX) 15.60 -0.06: Company now sees Q3 EPS of $0.06-0.08, vs the Reuters Research consensus of $0.21 and prior guidance at the low end of $0.20-0.30. Co's revised guidance excludes $125 mln income tax credit previously disclosed in its 8-K filing of March 16, 2004, which will provide a benefit of approx $0.25. Co says overall demand for Q3 was "modestly weaker than normal seasonal patterns and each major market exhibited characteristics since March 2," which adversely impacted co's ability to meet its previously stated earnings estimates. 4:01PM ON Semiconductor announces commencement of a cash tender offer for outstanding $260 mln of 12% Sr Subordinated Notes (ONNN) 7.54 -0.35: 12:08PM Nokia (NOK) 17.33 -3.82: Nokia lowered Q1 revenue guidance on weaker than expected Mobile Phone and Multimedia sales. The handset and telecom equipment leader expects revenue to come in at €6.6B, -2% Y/Y vs. guidance of +3-7% Y/Y; EPS to come in at €0.17 vs. guidance of €0.17-0.19. Reuters Research pegs consensus EPS at $0.24 on $8.764B. Mobile Phones sales declined in Asia and Europe due to lower than expected volumes and product mix as a result of gaps in the mid range segment of the company's product portfolio. The company estimates that global mobile phone shipments increased in excess of 25% in Q1 while the company grew by 19%, suggesting the company lost unit market share. Network revenue expected to be above expectations at €1.4B (+16% Y/Y). Enterprise Solutions is expected to come in slightly better than expectation. Overall profitability and operating margin looks to be within expectations as higher than expected contribution from the Multimedia, Networks and Enterprise Solutions businesses offset weaker than expected contribution from Mobile Phones. NOK shares are, based on our inverted EVA / DCF model, priced for sustained upper single digits revenue growth assuming stable operating margin. Shares trade at a discount to comps. The following table shows price multiples and Y/Y growth rates for NOK compared against peers in the communications equipment and computer systems & peripherals groups.Company P/SG Ratio P/OPG Ratio P/S Y/Y Revenue Growth TTM 2004E 2005E TTM 2004E 2005E Nokia (NOK) 2.0 14.2 2.3 2.1 2.0 (1.9%) 7.0% 7.7% LM Ericsson (ERICY) 2.9 (44.7) 3.1 2.9 2.7 (19.2%) 4.9% 7.1% Lucent (LU) 1.9 70.8 2.2 2.1 2.0 (20.0%) 4.4% 6.2% Motorola (MOT) 1.2 39.1 1.6 1.5 1.4 (0.8%) 7.9% 6.3% Nortel Networks (NT) 2.1 70.1 2.5 2.3 2.1 (7.2%) 10.1% 10.5% palmOne (PLMO) 0.8 (6.4) 1.1 1.1 0.9 (10.8%) 7.5% 15.8% Research in Motion (RIMM) 7.6 (174.2) 18.1 14.5 8.1 65.3% 92.2% 78.8% Communications Equipment 2.0 41.1 2.6 (4.8%) P/SG Ratio: Trailing 12 month (Price / Sales) / Growth ratio as of April 02, 2004. *P/OPG Ratio: Trailing 12 month (Price / Operating Income) / Growth ratio as of April 02, 2004. NOK shares are attractively valued on both a discounted cash flow and relative value basis. We would also continue to focus on PLMO. RIMM shares trade at a significant premium to peers, leaving little margin for error in execution. Texas Instrument (TXN 29.00 -1.94) shares lower by 6% on what we think is overdue profit taking in tech (see Tech Stocks) and as a result of concerns the company's exposure to NOK will negatively impact results. Reality is, TXN has broad exposure to communications equipment group, which is coming out of a three year recession. As NOK indicated, industry handset demand is firm; issues are specific to NOK and represent a change in customer preference between handsets rather than a shrinkage of overall market demand. TXN shares trade at a discount to peers on a multiples basis and are close to fair value on a discounted cash flow basis. TXN is highlighted in the April 5, 2004 Relative Value Ideas Focus List on Story Stocks. We would take advantage of weakness in both NOK and TXN.--Ping Yu, Briefing.com 9:26AM Advanced Power Technology (APTI) 11.40: Advanced Power Technology raised Q1 guidance on Monday. The designer of power semiconductors and modules for switching and RF (radio frequency) applications projects Q1 revenue at $14.8MM (+32.6% Y/Y) vs. prior guidance of $13.2-13.8MM and Reuters Research consensus at $0.02 on $13.50MM. APTI shares are, based on our inverted EVA / DCF model, priced for sustained lower 20% revenue growth from C06 assuming steady Y/Y improvement to upper teen operating margin. Revenue growth expectations modest compared against the faster growing power management segment (compound annual growth of over 30%), APTI's design win momentum and the company's small revenue base. APTI garnered over 20 design wins in Q4 across diverse markets including industrial, medical, and military & aerospace. The company exited Q1 with a book-to-bill of 1.75, up from 1.23 in Q4, and expects to bill revenue of $15.6-16.4MM (+24.9-31.3% Y/Y) in Q2. Operating margin expectations are above historical high of 14-15% with upside possible as company gains economies of scale. Shares trade at a discount to direct comps and to the semiconductor group. The following table shows price multiples and Y/Y growth rates for APTI compared against peers in the semiconductor group.Company P/SG Ratio *P/OPG Ratio P/S Y/Y Revenue Growth TTM 2004E 2005E TTM 2004E 2005E Advanced Power Technology (APTI) 1.1 (26.3) 2.4 2.0 1.6 27.6% 23.3% 25.6% Fairchild Semiconductor (FCS) 1.8 (72.8) 2.2 1.8 1.6 (1.1%) 17.9% 12.0% International Rectifier (IRF) 2.2 35.9 3.5 3.1 2.7 16.0% 19.5% 17.8% IXYS (SYXI) 1.0 (56.4) 1.9 1.7 1.4 44.6% 34.5% 22.0% On Semiconductor (ONNN) 1.2 130.2 1.9 1.6 1.4 (2.2%) 16.5% 10.6% Power Integrations (POWI) 4.2 27.7 7.4 6.1 5.0 16.2% 22.0% 21.3% STMicroelectronics (STM) 2.1 66.1 3.0 2.5 2.2 14.6% 21.9% 12.3% Semiconductor Components 3.0 55.0 4.7 14.7% P/SG Ratio: Trailing 12 month (Price / Sales) / Growth ratio as of April 02, 2004. **P/OPG Ratio: Trailing 12 month (Price / Operating Income) / Growth ratio as of April 02, 2004. Company is achieving scale efficiencies and approaching inflection point on profitability. Shares are attractively valued on both a discounted cash flow and relative value basis.--Ping Yu, Briefing.com biz.yahoo.com Good work Don! I'm having a hard time finding the time necessary to update in a timely fashion. RtS