09:35 Floor Talk: QCOM, NOK, OVTI
In light of the Nokia (NOK -16.5%) debacle taking place this morning, institutional desks are being vigilant in addressing any more potential weakness in wireless stocks. It came to our attention that a news service was reporting that China is testing its own 3G technology, which is being viewed by some as a potential negative for Qualcomm (QCOM -1.39, -2%). However, in speaking with sell side analysts, the news is not new and has been known for some time. The only concern on the street about the China issue is about royalties not being as high for td-scdma as they are with cdma and wcdma... Separately, there is also market concern that news of cheaper handset sales are negatively impacting sales at Nokia could be viewed as a negative for mobile phone suppliers such as OmniVision Technologies (OVTI -0.72, -2.5%), as handset makers look to squeeze better pricing out of suppliers.
09:16 INTC estimates cut at JMP Securities (28.55 )
JMP Securities lowers estimates on Intel (INTC) and its target price to $35 from $38. The estimate cuts are based on several factors: 1) delays in the high-volume 90nm technology production ramp of Intel's new desktop Prescott (Pentium 4) processor, mobile Dothan (new Centrino) processor until late in 2Q04; 2) a more aggressive forecasted processor pricing environment in PCs and server chips due to vigorous competition from a rejuvenated AMD; 3) continuing pricing pressure in the flash memory market; and 4) a somewhat sluggish, seasonally weak first-half PC industry. FY04 rev and GAAP EPS estimates goto $34.5 bln and $1.15 from $35.3 bln and $1.20.
08:48 NOK Nokia guides Q1 below consensus (21.15 ) -- Update --
Company now sees Q1 EPS at low end of previous guidance of 0.17-0.19 Euros, or approx $0.21, using current exchange rate, the Reuters Research consensus is $0.24, NOK sees Q1 sales below previous guidance, declining by 2% year-on-year due to sales of cheaper handsets. NOK says "lower than expected volumes and the product mix negatively impacted Mobile Phones' sales and operating profit."
08:45 MU Micron upped to Hold from Reduce at Dresdner (17.70 )
Dresdner upgrades Micron to Hold from Reduce. According to firm, capacity tightness continues in the DRAM market, leading spot prices dramatically higher in the last month. As a result of contract prices starting to move up (which follow spot prices), firm expects MU to be more profitable. Thus, firm sees little chance of sizable downside from the current valuation.
08:44 BofA cuts estimates for disk drive stocks
Banc of America cuts their June qtr and 2004-05 EPS ests below consensus for MXO, STX, and WDC; during their latest checks, firm says distributors mentioned soft end-demand for desktop drives as well as continued aggressive pricing on enterprise drives, which suggests that the drive co's will do no better than normal seasonality; firm says this is consistent with comments from Hutchinson, which last week pre-announced for the second time this qtr.
08:34 ADPT Adaptec guides Q4 outlook higher (8.77 )
Co announced that it expects Q4 revenue of apprx $121 mln and pro forma net income pershare of apprx $0.05-0.06, Reuters consensus is $115 mln and $0.04, respectively. Co states, "We attribute our improved operating results to higher levels of IT spending, resulting in higher-than-expected demand from our OEM customers and increased sales of our external storage solutions".
08:33 XING Qiao Xing renews relationship with Qualcomm (11.67 )
Co announces that its subsidiary, CEC Telecom Co, has renewed its agreement with QCOM. Under the agreement, CECT agreed to continue employing the patented technology of QUALCOMM, and to manufacture, distribute, and employ the "Subscriber Unit" in its CDMA phones.
08:33 SKX Skechers USA 'raises' Q1 guidance (13.17 )
Company sees Q1 EPS above previously guided range of $0.05-0.10, vs the Reuters Research consensus of $0.11 (First Call consensus is $0.10), due to a lower level of inventory markdowns; co also sees revenues above previously guided range of $190-200 mln, vs an R.R. estimate of $205.2 mln (F.C. consensus is $206.2 mln)... "The momentum has continued into the first quarter 2004 as we have seen better than expected shipments and increased demand for our products both domestically and internationally, including updates of core styles and new SKECHERS Sport outsoles."
08:13 LU Lucent fires C.O.O., President in China (4.42 )
Company announces it has "become aware of internal control deficiencies in foreign operations involving the Foreign Corrupt Practices Act, in addition to to those previously reported in Saudia Arabie". New deficiencies are in China, company fires four people in China: President, C.O.O., marketing exec and a finance manager.
08:12 GE General Electric reinitiated with an Outperform at Goldman Sachs (31.58 ) -- Update --
Goldman Sachs reinitiates coverage of GE with an Outperform rating (prior rating In-Line), citing improving industrial demand, mgmt's progress in executing its sweeping portfolio transformation, their increased confidence in the co's ability to return to double-digit earnings growth in 2005, and the stock's attractive relative valuation. Firm says the overhang from GE's ongoing portfolio transformation (including the approx $10.4 bln in share issuance to pay for Amersham) is creating an attractive entry point for investors, and they expect the near-term news flow to be positive following the co's recent positive preannouncement for 1H04 earnings and improving business trends.
08:12 NOK Nokia sees 1Q net sales down 2%, below guidance -- DJ (21.15 ) -- Update --
Handset, multimedia biz sales below expectations; Network sales exceed expectations.
08:08 NOK Nokia appears to be guiding down (21.15 )
08:06 TSM Taiwan Semi to supply semiconductor manufacturing services for Microsoft's future Xbox products (10.82 )
The breakthrough agreement expands an ongoing relationship between the two companies by providing Microsoft with direct, collaborative access to TSMC's advanced semiconductor process technologies
08:04 RFMD RF Micro Device increases shipments to Samsung (8.73 )
Co announces that it is shipping high-volume production of its RF3146 third-generation PowerStar power amplifier module to Samsung Electronics. The industry-leading 7x7x0.9mm RF3146 is powering multiple Samsung GPRS handsets across numerous phone platforms.
08:01 FDRY Foundry Ntwks: Smith Barney expects co to meet or beat for qtr (17.32 )
Smith Barney out positive on Foundry Networks saying that with the shares off nearly 50% since co reported above consensus 4Q03 results on Jan 28. Given the market seems to be pricing in a Q1 miss, could see solid upside if they hit numbers. Based on channel checks, conversations with mgmt, and other industry contacts firm sees continuing strength in Foundry's business despite the fact that Q1 is a seasonally weak period and despite some easing of the government business. They think the co will meet or exceed consensus expectations of $112.6 mln in revenues with a book to bill at or slightly above 1.0, and meet or exceed consensus EPS est of $0.17. |
