From Briefing.com: 6:20PM Wednesday After Hours prices levels vs. 4 pm ET: Investors have found favor with most of tonight's earnings reports, which were numerous and heavily concentrated in the tech sector. Trading has been active tonight with most releases coming in better than expected, sending the S&P futures to 1131 (4 points above fair value) and the Nasdaq 100 futures to 1486 (8 points above fair value).
The below table lays out the evening's most notable reports and the stocks' reactions:
After Hours Mover % Change Move Reason for Move
Advanced Micro Devices (AMD) +1% Semiconductor company blows past the Q1 (Mar) Reuters Research consensus EPS estimate by $0.09 on record sales; Says that its 'flash memory and microprocessor businesses delivered solid sales results in a seasonally down quarter'; As for Q2 (June), management expects 'seasonal patterns to prevail and sales to be approximately flat'; Direct competitor INTC is also up tonight
Apple (AAPL) +9% PC and software-related maker reports Q2 (Mar) EPS that nearly tripled to $0.14 and revenues that rose 29% to $1.91 bln - both of which were ahead of Street estimates; Apple also guided noticeably higher for Q3 (June), putting EPS at $0.14-0.15 and sales at $1.925 bln versus the consensus estimates of $0.09 and $1.81 bln, respectively; AAPL has declined 5% over the past weeks
Lam Research (00C0) -3% Chip equipment maker posts better than expected EPS and revenue numbers in its Q3 (Mar) report - consistent with what Briefing.com expected in our In-Play, a Platinum product, Earnings Preview; Stock still sells off in the after hours, but some of that selling pressure has been alleviated by the company's upside Q4 (June) revenue guidance on the conference call
Rambus (RMBS) -4% Memory-chip designer matches the Reuters Research Q1 (Mar) EPS estimate of $0.06 and provides in-line revenue guidance on its call; Stock drops in an extension of its 2-month, 18% losing streak; RMBS now trades below its 50-day simple moving average
Sandisk (SNDK) -14% Data storage name beats consensus estimates on the top and bottom-line in its Q1 (Mar) report and guides Q2 (June) and FY04 (Dec) revenues higher; Sellers, however, find fault with a few items in the report - namely, Q1 gross margins declined sequentially to 40% from 42%, and price per-megabyte fell 4% sequentially and 19% on a year-ago basis; SNDK has quadrupled in the past year
Texas Instruments (TXN) +1% Semiconductor company meets the Q1 (Mar) market expectation of $0.21 for EPS on sales that increased 34% to $2.94 bln (consensus of $2.89 bln); Company also issues Q2 (June) EPS and revenue ranges that are at the high-end of analyst estimates; TXN is a stock on Briefing.com's Tech Relative Value Ideas List (available in the Story Stocks archive for Apr 5)
Tomorrow, earnings will kick into high-gear with Citigroup (C), DR Horton (DHI), EMC (EMC), PepsiCo (PEP), and UnitedHealth Group (UNH) before the open, and IBM (IBM) and Sun Microsystems (SUNW) after the close. Economic reports are also well-represented with weekly initial claims, April NY Empire State Index, and April Philadelphia Fed on the calendar.
For more detail on these, and other developments, be sure to visit our Stock Market Update and Daily Sector Wrap. -- Heather Smith, Briefing.com
5:20PM Rambus reaffirms Q2 revenues (RMBS) 28.02 -0.41: -- Update -- On call, management says Q2 revenues are expected to be in the range of $32-35 mln. The consensus estimate is for Q2 revenues of $33.45 mln. Operating expenses are anticipated in the range of $24-28 mln due to litigation charges of roughly $5-7 mln.
4:51PM Rambus earnings color (RMBS) 28.43 +0.14: -- Update -- Reuters Research is telling us that, excluding the $2.1 mln gain, an actual of $0.06 per share is comparable to analysts' estimates, bringing Rambus in line with the $0.06 consensus... see 16:15 comment for full earnings report.
5:19PM Lam Research guides revs higher for Q4 (LRCX) 26.82 -0.02: -- Update -- On conference call, LAM says Q4 (June) revenues should reach $300 mln ('consistent with current customer order patterns') versus the Reuters Research consensus estimate of $270.6 mln. Gross margins should be approximately 47% of revenues, and bookings should be up 10-15% sequentially.
5:16PM Lam Research gives bullish JuneQ shipment guidance (LRCX) 26.82 -0.02: -- Update -- On conference call, management says shipments in Q4 (June) should be 120% higher than in Q2 (Dec)... Financial targets for Q4 will follow.
4:22PM Lam Research beats by $0.03, beats on revs (LRCX) 26.81 -0.03: Reports Q3 (Mar) earnings of $0.13 per share, $0.03 better than the Reuters Research consensus of $0.10; revenues rose 23.6% year/year to $231.1 mln vs the $215.9 mln consensus.
3:15PM Lam Research Earnings Preview (LRCX) 26.40 -0.44: -- Update -- Lam Research is scheduled to report Q3 results this afternoon, with Reuters Research EPS consensus at $0.10 and revs of $215.9 mln. WR Hambrecht believes that most analysts are looking for slightly higher numbers (i.e., $0.11-$0.12 on revs near $220 mln) given the general industry strength and Lam's propensity to exceed guidance. The firm's order guidance calls for a 25% bookings increase to approx $340 mln. Fulcrum notes that stronger than seasonal sales of wafer processing equipment reported by SEMI for the first two months of Q1 as well as a solid confirmation of SEMI data by Novellus' numbers bodes well for Lam's results. As such, the firm expects an upside surprise from LRCX on both the top and bottom lines.
4:34PM Apple Computer beats, guides higher (AAPL) 26.64 -0.29: Reports Q2 (Mar) earnings of $0.14 per share, excluding a $0.02 charge, $0.04 better than the Reuters Research consensus of $0.10; revenues rose 29.4% year/year to $1.91 bln vs the $1.81 bln consensus. Company sees Q2 EPS of $0.14-0.15, excluding ($0.02) in restructuring charges, vs consensus of $0.09, sees Q2 revenues of $1.925 bln, consensus is $1.81 bln.
4:23PM SanDisk beats by $0.02, guides Y04 revs above consensus (SNDK) 32.51 +0.98: Reports Q1 (Mar) earnings of $0.34 per share, $0.02 better than the Reuters Research consensus of $0.32; revenues rose 121.8% year/year to $386.9 mln vs the $370.7 mln consensus. Co sees Q2 revs of $400-420 mln vs the Reuters Research consensus of $402.6 mln. For Y04 Co sees revs of $1.6-1.8 bln vs the consensus of $1.33 bln.
3:36PM SanDisk Earnings Preview (SNDK) 32.42 +0.88: SanDisk (SNDK) is scheduled to report Q1 (Mar) results today after the market closes, with Reuters consensus EPS at $0.32 (high end est $0.34) and revs at $370.66 mln. Susquehanna Financial and RBC capital both expect SNDK to top consensus ests. Susquehanna believes upside for Q1 will be driven by strong demand for NAND flash cards coupled with a benign pricing environment, and says the additional royalty rev from Toshiba for MLC technology should help SNDK to improve its gross margins Q/Q (co guided for 33-35% for Q1). RBC Capital states that although Q2 guidance is likely to be conservative, their checks indicate the historically strong Q2 (co posted 35% and 38% q/q growth previous 2 years) is looking good, with expectations of 15% top-line growth. Earnings Volatility History: In the past 2 qtrs, on Jan 21 the co beat by 16 cents, guided in-line (stock down 16% the following day); on Oct 15 the co beat by 15 cents, guided above consensus (stock -1%).
4:20PM Advanced Micro beats by $0.09 (AMD) 17.11 -0.05: Reports Q1 (Mar) earnings of $0.12 per share, $0.09 better than the Reuters Research consensus of $0.03; revenues rose 73.0% year/year to $1.24 bln vs the $1.17 bln consensus. Company guidance for Q2- "In aggregate, AMD expects seasonal patterns to prevail and sales to be approximately flat".
4:19PM Redback Networks misses by $0.01 (RBAK) 6.97 +0.47: Reports Q1 (Mar) loss of $(0.15) per share, ex-items, $0.01 worse than the Reuters Research consensus of $(0.14); revenues rose 2.3% year/year to $30.2 mln vs the $29.7 mln consensus. Note, the co emerged from Chapter 11 bankruptcy on Jan 2, 2004.
4:17PM Planar Systems misses by $0.01, issues Y04 guidance (PLNR) 13.05 -0.42: Reports Q2 (Mar) earnings of $0.05 per share, $0.01 worse than the Reuters Research consensus of $0.06; revenues fell 2.5% year/year to $58.6 mln vs the $57.5 mln consensus. Co alsos guides, sees Y04 EPS of approx $0.60, vs the R.R. consensus of $0.69, and revenues of $260 mln, vs the R.R. consensus of $254.3 mln.
4:17PM AMD headline number is $0.12, consensus $0.03 -- not sure if comparable yet; revs $1.236 bln vs $1.166 bln :
4:15PM Rambus reports (RMBS) 28.43 +0.14: Reports Q1 (Mar) earnings of $0.07 per share, which includes a $2.1 mln gain on sale of investment. After backing this out and dividing by shares outstanding, we came up with EPS of $0.06, Reuters Research consensus is $0.06; revenues rose 15.7% year/year to $32.5 mln vs the $32.9 mln consensus. In touch with Reuters to confirm comparable earnings actual.
4:09PM Extreme Networks reports in line (EXTR) 7.46 -0.12: Reports Q3 (Mar) GAAP loss of $0.01 per share, in line with the Reuters Research consensus of ($0.01); revenues rose 4.3% year/year to $88.9 mln vs the $87.0 mln consensus.
4:07PM Extreme prelim loss of $0.01, in line :
4:07PM RBAK misses by a penny, revs slightly ahead :
4:04PM Texas Instruments reports in line, guides Q2 revs higher (TXN) 28.68 -0.30: Reports Q1 (Mar) earnings of $0.21 per share, in line with the Reuters Research consensus of $0.21; revenues rose 33.9% year/year to $2.94 bln vs the $2.89 bln consensus. Company sees Q2 EPS of $0.23-0.26 vs consensus of $0.23 on revenues of $3.085-3.325 bln, consensus is $3.06 bln.
9:42AM Raymond James initiates coverage of Storage stocks : Raymond James initiates coverage EMC Corp (EMC), Network Alliance Corp (NTAP), and Brocade Communications (BRCD) with Market Perform ratings, and QLogic Corp (QLGC) and Emulex Corp (ELX) with Underperform ratings. Firm says that it is not clear that EMC understands the urgency to transition its sales model to leverage resellers, and thinks the stock is fairly valued in the mid-teens, which is 30x CY05 earnings power of $0.50-$0.55. Firm says NTAP continues to be the only major co that understands the power of data mgmt for customers, but the presence of Microsoft as a competitor becomes more realistic every year, and much of Microsoft's success will come at the expense of NTAP if it does not figure out how to protect itself with its own channel strategy. Firm says ELX and QLGC have no place to go but down after riding the high margin FC HBA highway, and says NICs for Ethernet are low margin business and there is no reason to think the same will not happen for SAN HBAs. Finally, changing from an OEM to a reseller biz model will be difficult for both BRCD and McData, but BRCD stands to benefit near-term from a product refresh in its installed base.
9:35AM EMS sector should post strong Q1 revs -- Thomas Weisel : Thomas Weisel previews Q1 for the EMS sector. The firm expects strong revenue numbers, reflecting a broad-based recovery in key end markets, but the earnings picture continues to be mixed. The firm believes FLEX has the best chance to beat its EPS forecast with others making the numbers, but CLS may struggle. After JBL, FLEX is clearly the best of the rest. The firm expects SANM to meet estimates though there is greater likelihood of top line upside.
1:50PM Linear Technology (LLTC) 39.90 +0.66: Linear Technology posted Q3 results after the close on Tuesday. The designer and manufacturer of standard high performance linear integrated circuits for communications, computing, consumer electronics, industrial and networking applications printed EPS of $0.27 on revenue of $209.133MM (+36.0% Y/Y) vs. consensus at $0.25 on $203.74MM.
Bookings increased across all sectors, driven by communications and industrial customers. Communications account for 39% of sales (Handsets 18%; Infrastructure 10%; Networking 11%); Industrial 31%; Computing 19%; High-end Consumer 5%; Automotive 4% and Other 2%.
Demand was strong across geographies. Asia-Pacific/ROW accounts for 39% of sales; U.S. 30%; Europe 16%; and Japan 15%.
Gross margin increased 286 bps Y/Y to 77.2%. Operating margin increased 536 bps Y/Y to 54.7%.
Company is experiencing strong demand in all geographies, from most sectors and for all product categories. Guided for Q4 revenue of $223.772-225.864MM (+35.0-36.3% Y/Y). Reuters Research prints consensus EPS at $0.27 on $217.25MM.
LLTC shares are, based on our inverted EVA / DCF model, priced for sustained upper 20% to 30% revenue growth assuming mid to upper 50% operating margin.
The following table shows price multiples and Y/Y growth rates for LLTC compared against the semiconductor components group. Company *P/SG Ratio **P/OPG Ratio P/S Y/Y Revenue Growth
TTM 2004E 2005E TTM 2004E 2005E
Linear Technology (LLTC) 8.5 19.1 18.0 15.7 12.5 21.8% 28.7% 25.7%
Analog Devices (ADI) 4.4 28.2 8.4 6.8 5.7 22.6% 31.0% 21.0%
Maxim Integrated Circuits (MXIM) 7.0 21.0 13.1 11.3 9.0 10.7% 23.5% 26.0%
Micrel (MCRL) 4.1 234.5 5.8 4.6 3.8 3.5% 27.5% 19.7%
National Semiconductor (NSM) 2.9 33.5 4.6 4.3 3.6 10.2% 17.5% 22.1%
Texas Instruments (TXN) 3.1 41.6 5.1 4.0 3.5 17.3% 27.3% 14.6%
Semiconductor Components 3.1 53.1 4.9 13.1%
*P/SG Ratio: Trailing 12 month (Price / Sales) / Growth ratio as of April 08, 2004.
**P/OPG Ratio: Trailing 12 month (Price / Operating Income) / Growth ratio as of April 08, 2004.
Shares are priced for above-industry average growth, modest margin improvement and trade at a premium to peers, suggesting LLTC will have to continue to capture market share to deliver on market expectations. Limited upside until management demonstrates progress in capturing greater market share or unless overall market expands. We would focus on ADI.--Ping Yu, Briefing.com
11:27AM Adtran (ADTN) 29.11 +1.14: Adtran posted Q1 results after the close on Tuesday. The provider of high-speed digital network transmission products and services reported EPS of $0.25 on revenue of $114.039MM (+32.3% Y/Y) vs. Reuters Research consensus at $0.22 on $110.64MM, driven by new DSLAM and VPN products.
Gross margin increased 286 bps Y/Y to 57.5% on manufacturing efficiencies. Operating margin increased 1026 bps Y/Y to 24.9%.
Guided for Q2 EPS of $0.24-0.26 on $117-120MM (+29.4-32.7% Y/Y) vs. consensus at $0.24 on $117.13MM and C04 EPS of $0.97-1.00 on $475.0-485.0MM (+19.7-22.3% Y/Y) vs. consensus at $0.98 on $480.11MM. Full year gross margin and operating expense as a percent of sales expected to be approximately 56% and 31.5% respectively.
Management's near-term guidance remains materially below growth and operating margin expectations baked into ADTN shares, which are, based on our inverted EVA / DCF model, priced for sustained upper 20% revenue growth assuming flat 25% operating margin. Implied growth rate drops to lower 20% assuming steady improvement to 30% operating margin.
The total addressable market opportunity for ADTN products exceed $14B (2005E) but the expected revenue growth for ADTN is materially above current long-term forecasts for the carrier market, which accounts for over 60% of sales, suggesting sustained 20%+ growth is possible relative to the company's small size but would be heavily dependent on new products, significant market share gains and growth within the enterprise market.
The following table shows price multiples and Y/Y growth rates for ADTN compared against the communications equipment group. Company *P/SG Ratio **P/OPG Ratio P/S Y/Y Revenue Growth
TTM 2004E 2005E TTM 2004E 2005E
Adtran (ADTN) 3.3 21.0 5.2 4.6 4.0 21.8% 21.0% 14.9%
ADC Telecommunications (ADCT) 3.0 (57.8) 3.2 3.3 3.1 (21.8%) (7.7%) 7.8%
Alcatel (ALA) 1.6 (18.3) 1.4 1.4 1.3 (24.4%) (1.3%) 3.9%
Carrier Access (CACS) 3.0 124.8 5.3 2.8 2.2 24.7% 91.2% 29.2%
Cisco Systems (CSCO) 4.8 23.5 8.2 7.5 6.6 3.2% 15.4% 12.6%
NetScreen Technologies (NSCN) 4.0 39.4 12.3 9.0 6.9 71.4% 53.3% 30.7%
Nortel Networks (NT) 1.9 66.2 2.5 2.3 2.0 (7.2%) 10.1% 10.5%
SonicWall (SNWL) 4.8 (39.6) 6.9 5.2 4.4 (8.5%) 33.3% 18.4%
WatchGuard (WGRD) 1.9 (18.6) 3.2 3.0 2.5 6.1% 9.8% 16.1%
Communications Equipment 1.8 40.1 2.4 (5.1%)
*P/SG Ratio: Trailing 12 month (Price / Sales) / Growth ratio as of April 08, 2004.
**P/OPG Ratio: Trailing 12 month (Price / Operating Income) / Growth ratio as of April 08, 2004.
Strong results but ADTN shares remain richly valued despite pulling back over 21% since the Q3 preview (Story Stocks, October 13, 2003).--Ping Yu, Briefing.com
9:10AM Intel (INTC) 27.33 -0.34: Intel posted Q1 results after the close on Tuesday. The world's leading chipmaker printed EPS of $0.26 on revenue of $8.091B (+19.8% Y/Y) vs. Reuters Research consensus at $0.27 on $8.169B. EPS of $0.26 includes the $225MM Intergraph patent litigation settlement charge.
Gross margin, including the settlement charge, increased 817 bps Y/Y to 60.2%. Operating margin increased 947 bps Y/Y to 31.3%; Intel Architecture operating margin increased 980 bps Y/Y to 42.9%; communications operating margin improved 200 bps Y/Y to (20.6%).
Sales driven by new product introductions and recent design wins. The company is ramping production on 90nm. Intel Architecture microprocessor revenue increased 23.0% Y/Y to $5.980B (74% of sales) as the company began shipments of Prescott (desktop 90nm), Dothan (mobile 90nm), Xeon MP, blade servers and enhanced versions of existing processors; Intel Architecture chipset and motherboard revenue increased 14.6% Y/Y to $1.045B (13% of sales); Communications revenue increased 10.6% Y/Y to $1.065B (13% of sales); Flash revenue increased 2.0% Y/Y to $0.417B (5% of sales).
Demand was strong across regions. Asia-Pacific revenue increased 24.3% Y/Y to $3.284B (40% of sales); Americas revenue increased 12.4% Y/Y to $2.163B (27% of sales); Europe increased 17.4% Y/Y to $1.927B (24% of sales); Japan revenue increased 31.8% Y/Y to $1.927B (24% of sales).
Q1 results demonstrate management is finally turning around the flash memory business and confirms our view that Intel's investments in R&D and process technologies strongly position the company for growth and operating improvement.
A number of new digital consumer electronics products based on the Prescott processor, Granstdale chipset, displays based on Intel's LCOS (liquid crystal on silicon) technology, and single chip solutions for the wireless market that combine communications, applications and memory functionalities are slated to reach the market in H2:04 and 2005. Recently announced 90nm NOR flash memory, slated for volume production in H2:04, reduces die size by 50% and is expected to drive margin expansion within the flash business; expect overall operating margin improvement as the company continues to ramp 90nm across product lines.
Guided for Q2 revenue of $7.6-8.2B (+11.5-20.3% Y/Y) vs. consensus at $0.27 on $8.109B. Q2 gross margin is expected to be 60% +/- a few points; full year gross margin unchanged at 62% +/- a few points. Q2 operating expenses (R&D plus MG&A) expected to be $2.4B; full year R&D unchanged at $4.8B. Capital spending for 2004 is unchanged at $3.6-4.0B.
Intel shares are, based on our inverted EVA / DCF model, priced for sustained lower 20% revenue growth assuming steady Y/Y improvement to mid to upper 30% operating margin.
The following table shows price multiples and Y/Y growth rates for INTC compared against the semiconductor components group. Company *P/SG Ratio **P/OPG Ratio P/S Y/Y Revenue Growth
TTM 2004E 2005E TTM 2004E 2005E
Intel (INTC) 3.4 16.8 5.7 5.2 4.7 17.8% 28.7% 25.7%
Advanced Micro Devices (AMD) 4.4 28.2 1.7 1.2 1.1 22.6% 42.0% 10.5%
Transmeta (TMTA) 7.0 21.0 33.7 10.2 3.4 10.7% 231.7% 197.4%
Sun Microsystems (SUNW) 4.1 234.5 1.3 1.4 1.3 (8.1%) (3.5%) 10.1%
ATI Technologies (ATYT) 3.1 41.6 2.5 2.2 1.9 17.3% 36.3% 13.1%
nVidia (NVDA) 1.9 56.9 2.3 2.1 2.0 (4.5%) 10.5% 7.6%
Applied Micro Circuits (AMCC) 13.1 2.1 18.5 14.9 8.4 (6.9%) 26.6% 76.7%
Broadcom (BRCM) 4.5 (22.7) 8.0 5.3 4.6 48.7% 50.4% 16.4%
PMC Sierra (PMCS) 6.8 (139.4) 12.3 9.0 7.2 14.4% 37.0% 24.9%
Qualcomm (QCOM) 6.7 24.6 13.3 11.8 10.9 19.7% 14.4% 8.7%
Intersil (ISIL) 3.4 32.5 6.4 5.4 4.6 21.0% 18.5% 16.8%
Marvell Technology Group (MRVL) 3.3 63.3 7.6 5.3 4.4 62.3% 42.1% 21.7%
Semiconductor Components 3.1 53.1 4.9 13.1%
*P/SG Ratio: Trailing 12 month (Price / Sales) / Growth ratio as of April 08, 2004.
**P/OPG Ratio: Trailing 12 month (Price / Operating Income) / Growth ratio as of April 08, 2004.
Intel shares are close to fair value, providing the patient investor with modest upside.--Ping Yu, Briefing.com
biz.yahoo.com
You could be right Kirk. Watch the up/down volume to see if institutional support comes back. Lately there has been some institutional support. But you still won't get me to back your version of the future until we get a new 52 week high on the Dow Transports.
RtS Out! |
