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.

Strategies & Market Trends : Technical analysis for shorts & longs -- Ignore unavailable to you. Want to Upgrade?

To: Johnny Canuck who wrote (44718)	4/11/2008 2:20:57 AM
From: Johnny Canuck	Read Replies (1) \| Respond to of 68479

Market Scan Emcore Strengthens Its Core Melinda Peer, 04.10.08, 8:30 PM ET Emcore Tear Sheet Chart News Popular Videos Billionaires Of Basketball NBC Bets Big On 'The Office' Jay-Z's Big Deal Yankees' Super Stadium Investors Pick Tobacco Related Stories Encore! Emcore Buys More Intel Assets Intel Inside: Emcore Acquires More Assets The LED Illumination Revolution EMCORE Warms Up To Solar Energy Wireless Shootout: Suits Vs. Cowboys Today's Top Stories • Yahoo!, Microsoft Saga Takes New Turn • American Cancels 900 More Flights • Retail Sales See No Easter Bounce • BoE Cuts U.K. Rates, Eurozone Holds • Stocks Close Up, Tech Sector Shines Most Popular Stories Young Billionaires Easily Overlooked Tax Deductions The No-Tech Hacker Job Hunting In A Downturn How To Tap Lenders When Credit Is Tight Emcore is fattening up, buying more assets from Intel and expanding in China, as a prelude to splitting itself in two. On Thursday, Emcore (nasdaq: EMKR - news - people ) said it agreed to acquire enterprise and storage assets from the optical platform division of Intel (nasdaq: INTC - news - people ), in addition to the company's connects cables business, for 3.7 million shares of restricted stock. The transaction bolsters Emcore's fiber-optics business. Fiber optics--pervasive in telecommunications and computer networking--uses thin, transparent fibers to transmit high-speed video, voice and data. Optical fibers are more adept at long-distance communication than metal wires. In addition to fiber optics, Emcore operates a solar photovoltaic business, which converts light into electrical energy. Emcore will acquire optical cable interconnects, which are used in computing clusters; intellectual property, inventory, fixed assets and technology relating to optical transceivers. This is Emcore's second acquisition from Intel in less than six months. In December, Emcore acquired the telecom-related portion of Intel's optical platform division for $85 million. The deal was motivated by Emcore's desire to increase its presence in the telecommunications market while expanding its fiber optics product portfolio. Emcore's move to beef up its visibility is apparently part of the company's larger plan to spin off its two business segments--fiber optics and photovoltaics--into separate corporations. On April 4, the company's board authorized management to prepare a strategic plan for the separation on the same day that it appointed Reuben Richards as executive chairman. Dr. Hong Hou, the company's president and chief operating officer, replaced Richards as chief executive. Assets acquired from Intel's optical platform are expected to add $45 million to Emcore's sales over the next 12 months. The connects cables business, however, is expected to have the fastest growth, with gross margins projected to exceed 50%. "This acquisition will provide additional manufacturing efficiencies through economies of scale and vertical integration, benefiting our enterprise, storage, telecom, cable and high-performance computing customers," said Executive Chairman Reuben Richards of Emcore. Also on Thursday, Emcore agreed to supply one of China's largest energy companies, XinAo Group, with concentrator photovoltaic systems for its clean energy program. XinAo and Emcore plan to build a jointly owned factory in China to produce the solar energy systems for the Chinese market. "Through our wholly owned subsidiary, Emcore China, located in the same city as XinAo, we will be able to form an efficient and cost-effective manufacturing capability to serve XinAo and other demands in the Chinese market," said Vice President Earl Fuller. Emcore shares gained 23 cents, or 3.3%, on Thursday, closing at $7.19. Intel shares closed up 66 cents, or 3.1%, at $22.08. Separately, Banc of America analyst Sumit Dhanda upgraded Intel to "buy" from "neutral" in a flood of upgrades to the semiconductor industry. Dhanda expects chip stocks to surge as inventories and earnings estimate revisions suggest the shares are near a bottom, making it an ideal time to buy. "Supply-chain inventories are below equilibrium levels and rapidly falling while our earnings revisions momentum indicator has recently crossed into negative territory--implying a decline in estimates--and is quickly approaching what we believe will be an inflection point in the pace of declines," Dhanda said. Dhanda upgraded Intel because earnings are expected to be positively impacted by share buybacks and new product introductions--specifically from its new low-end computer line. Additionally, Dhanda is confident that Intel can exceed analysts' expectations for profitability.