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 : Applied Materials No-Politics Thread (AMAT) -- Ignore unavailable to you. Want to Upgrade?

To: etchmeister who wrote (19054)	5/23/2006 12:28:51 PM
From: Proud_Infidel	Read Replies (1) \| Respond to of 25522

UPDATE 2-ASML raises Q2 order book outlook, shares up 7 pct Tue May 23, 2006 4:56 AM ET (Adds analyst comment, share price, background) By Wendel Broere and Lucas van Grinsven AMSTERDAM, May 23 (Reuters) - Dutch chip equipment maker ASML (ASML.AS: Quote, Profile, Research) on Tuesday raised its second-quarter order book outlook on the back of strong demand for semiconductors, sending its shares up almost 7 percent and setting off a flurry of upgrades. ASML (ASML.O: Quote, Profile, Research) said the order book should translate into higher sales of new chip production systems in the fourth quarter this year and the first quarter of 2007. Chip makers are looking to increase capacity because demand for electronics products like mobile phones is much stronger this year than expected. The company is the world's largest producer of chip lithography machines which map electronic circuits onto silicon wafers, the heart of the chip-making process. ASML forecast order entries to be at least 40 percent higher in the second quarter than the previous quarter's net bookings of 62 lithography systems, a sharp upgrade from its forecast just over a month ago for orders similar to the first quarter. "Our higher than expected second quarter bookings intake further confirms the steady capacity increase need of the semiconductor industry, and the growing market acceptance of ASML technology," ASML President and CEO Eric Meurice said. He said demand was particularly strong for ASML's most advanced immersion machines, which cost more than 25 million euros and which can map electronic circuits on silicon chips in the 45 nanometre node -- a nanometre is a billionth of a metre. ASML has this market to itself because its Japanese rivals cannot yet supply the systems that are sought after by memory chip makers to cram more memory on a small surface and so reduce the cost per bit of memory while at the same time allow production of smaller MP3 players and digital cameras. ASML shares jumped almost 7 percent after the news and were up 5.9 percent at 15.40 euros by 0845 GMT, outperforming the DJ Stoxx European technology index which was up 1.8 percent. ROOM TO RAISE ESTIMATES "With this outlook and a lot of room to raise our estimates, the operational outlook is strong," analyst Eric de Graaf at brokerage Petercam said in a note to investors. "The valuation already moved to attractive in recent weeks as a result of share price declines, and now looks outright attractive," it said and raised its recommendation to "add" from "hold", while maintaining a 19 euro price target. ABN AMRO said it raised its recommendation to "hold" from "sell", Delta Lloyd went to "accumulate" from "reduce", and according to dealers Merrill Lynch raised its view to "neutral" from "sell". Lehman, however, did not reverse its week-old downgrade to "underweight" because it still holds to the view that ASML's bookings will peak in the first half of 2006. "Equipment stocks have historically traded on bookings, and the irony is that the bookings peak tends to lead the earnings peak," analyst Navdeep Sheera said in a note. ASML last month reported a lower first-quarter profit, missing most forecasts, but pulled in more new orders than expected. The company's revenues and profit tend to lag order trends by about two quarters, and with such a strong order book it was upbeat about revenues for 2006. Japanese rival Nikon Corp. (7731.T: Quote, Profile, Research) posted a 20 percent rise in annual net profit last week and said the outlook for its stepper division was much brighter with the semiconductor market in an upswing and LCD producers like Sharp Corp. (6753.T: Quote, Profile, Research) aggressively building new plants to meet fast-growing demand for LCD TVs.

To: etchmeister who wrote (19054)	5/23/2006 1:06:18 PM
From: dr_elis	Read Replies (5) \| Respond to of 25522

"2006 looking strong makes it harder to increase growth rates going forward - and as we know the analyst community is programed on growth rates." It seems good news are bad news? Would we have higher stock prices by now with a less stellar 2006 capex? I don´t think so. The key word is probably "uncertainty". The previous cycles were in a sense eventually better predictable than the current scenario of steady growth until a very strong 2008 with periods of fast and not so fast growth in between.