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To: David Aegis who wrote (1288)	11/4/1997 12:21:00 AM
From: Ian@SI	Respond to of 2946

Lehman coverage of Conference call: Raised estimates. Not much else new. Ian. ++++++++++++++++++++++++++++++ Headline: Silicon Vy Grp: Strong 4Q Orders; Estimates Raised Author: Edward C. White, Jr., CFA Rating: 2 Company: SVGI Ticker : SVGI Rank(Prev): 2-Outperform Rank(Curr): 2-Outperform Price : $26 15/16 52wk Range: $38-16 Price Target: $40 Today's Date : 10/31/97 Fiscal Year : SEP ------------------------------------------ EPS 1996 1997 1998 1999 QTR. Actual Prev. Curr. Prev. Curr. Prev. Curr. 1st: 0.54A 0.11A 0.11A 0.40E 0.37E 0.45E 0.51E 2nd: 0.58A 0.14A 0.14A 0.41E 0.41E 0.53E 0.58E 3rd: 0.58A 0.20A 0.20A 0.44E 0.45E 0.61E 0.62E 4th: 0.38A 0.25E 0.26A 0.45E 0.52E 0.66E 0.69E ------------------------------------------------------------- Year:$ 2.07A $ 0.70E $ 0.73A $ 1.70E $ 1.75E $ 2.25E $ 2.40E Street Est.: $ 0.70E $ 0.71E $ 1.77E $ 1.76E $ 3.60E $ 2.78E ---------------------------------------------------------------- Price (As of 10/29): $26 15/16 Revenue (1998): 789.0 Mil. Return On Equity (97): 9.5 % Proj. 5yr EPS Grth: 22.0 % Shares Outstanding: 32.2 Mil. Dividend Yield: Nil Mkt Capitalization: 867.40 Mil. P/E 1998; 1999 : 15.4 X; 11.2 X Current Book Value: $17.53 /sh Convertible: None Debt-to-Capital: 0 % Disclosure(s): C ---------------------------------------------------------------- * Silicon Valley Group reported 4Q EPS of $0.26, slightly above our $0.25 estimate. Orders of $205.7 mill. represented a new record. Micrascan orders are strong, and we are raising our FY98 EPS estimate to $1.75 from $1.70. * SVG shipped 12 Micrascan units, produced an in-house unit, and refurbished a unit. Micrascan orders totaled 35 units, of which 16 were for shipment within the next 12 months. * The Thermco division had lower revenues and a book-to-bill ratio over 1.00. The track division had better revenues, and a book-to-bill ratio modestly below 1.00. These areas should fare better in FY '98 than they have recently. * The gross margin increased meaningfully in the quarter, as a result of higher revenue volume, and better margins in lithography. The outlook calls for modest margin improvement early in FY98, and more in the second half. * This was a solid quarter for the company. Silicon Valley Group continues to make progress in booking Microlithography orders for the future (75 units are currently on order), and in building its manufacturing capacity.