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

To: Donald Wennerstrom who wrote (29933)	4/12/2006 8:12:05 PM
From: Donald Wennerstrom	Read Replies (2) \| Respond to of 95427

Going along with the previous post, a table was presented by CSFB for LRCX which is shown below in summary form for 2006. - ITEM CY1Q CY2Q CY3Q CY4Q SUM SHIPMENTS(M) 510 515 424 400 1849 REVENUE(M) 430 500 480 450 1860 EPS 0.63 0.81 0.73 0.62 2.79 BOOKINGS(M) 515 530 425 375 1845 This exercise gives the "thought process" for the presently predicted 2H06 slowdown by many analysts. Notice the "rolloff" in Shipments, Revenue, and Bookings in the last half of the year. We can look at the difference between CY2Q and CY4Q in another simple table. - PCT - ITEM CY2Q CY4Q CHG CHG SHIPMENTS(M) 515 400 -115 -22 REVENUE(M) 500 450 -50 -10 EPS 0.81 0.62 -0.19 -23 BOOKINGS(M) 530 375 -155 -29 Obviously, these are some very large reduction numbers projected for 2H06. Just look at the Bookings number(s) - down 155M in the 4th quarter compared to the 2nd quarter, or -29 percent. In the meantime, in just the last few days, semiconductor sales projections for 06 have been increased. We are staring at the "cycle scenario", but do we really have "cycles" anymore like we have had in the past? Don

To: Donald Wennerstrom who wrote (29933)	4/13/2006 11:56:53 AM
From: Donald Wennerstrom	Read Replies (2) \| Respond to of 95427

This is a follow-up report from CSFB today for the quarterly report presented by LRCX last night. Their report put forth just prior to last night's LRCX report is at Message 22353107 <<F3Q above consensus. F3Q rev/on-going EPS of $437.4mm and 65c was above our estimate at $430mm and 63c; cons was $424.3mm and 62c. March orders $520mm (+29% q/q), guidance was 25-30% q/q; we were at +27.5%. On-going EPS included option expense of ~4c; but excludes ~5c in a one-time tax-related expense. Order growth was driven by Korea (up 63% q/q to 29% of orders); APAC (up 57% q/q to 28% of total). As expected, memory orders declined from 80% of orders in Dec to ~53% of orders in March. F3Q shipments of $511mm (up 30% q/q) inline. One slight blemish in qtr - GMs at 50.2% 30bps lighter than guidance due to lower margin spares mix. F4Q well above consensus. Off the higher base, company guided F4Q (Jun) rev/EPS to $490-$510mm and 80-85c; inline with our estimate of $500mm and $0.81; but well above street consensus at $466.8mm and 72c. Company guided June orders to up 5- 15% q/q (~$546mm-$598mm); 10% order growth at mid-pt essentially inline with recent consensus expectations in our view. Company guided shipments up ~10-12% q/q (~$565mm); memory orders expected to increase to ~60% of mix in June, driving order upside. Still sprinting. We are revising June rev/EPS from $500 mm and $0.81 to $510mm and 83c. For CY06, numbers go from $1.86bb and $2.79 to $2.0bb and $3.10; consensus was too low at $1.83bb and $2.70. Our CY07 est. go from $1.87bb and $2.59 to $2.06bb and $3.10; we are assuming a tax rate of 25%. Mgmt thinks Sep orders should be up based upon current visibility. We continue to think Sep/Dec orders will be down 10% q/q for the group, but mgmt addressing this in some fashion removes this overhang in the near term. Outlook. LRCX significantly beat expectations as we previewed, but bears will still make the call that Sep is now the new peak for LRCX. However, the bigger picture from the call is really that LRCX’s results reaffirms our longer term positive thesis - stock looks cheaper now at ~14x NTM EPS of $3.19, versus ~19x for the group and market share gains are having big impact. Growth from new market segments still on the come. Although stock is likely to open higher today, we are buyers of LRCX today, because momentum concerns have been deferred, and LRCX’s alpha shines more brightly than ever. Revising PT from $48 to $55, representing ~18x our new CY06 estimates. LRCX qtr could help other SCE names trade higher - (i.e. NVLS/VSEA - see analysis) – but we would be sellers into strength on other names given our 2H view.