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

To: Jacob Snyder who wrote (53694)	9/13/2011 3:31:52 PM
From: Donald Wennerstrom	Respond to of 95520

WFR on the other hand is a different story. S&P has not upgraded the WFR outlook since last 4 Aug. August 4, 2011 09:24 am ET ... S&P KEEPS HOLD RECOMMENDATION ON SHARES OF MEMC ELECTRONIC MATERIALS (WFR 6.99***): WFR posts Q2 operating EPS of $0.29, vs. $0.06, beating our $0.10 estimate. Sales rose 1.3% from Q1, aided by $149M from a solar contract resolution and higher semiconductor wafer shipments. Despite challenging solar and semiconductor wafer pricing and volume trends, we think a rising SunEdison backlog as well as the planned purchase of Fotowatio Renewable will help it better navigate the current environment.We cut our '11 operating EPS estimate $0.07 to $0.80 and '12's by $0.15 to $0.91.We reduce our 12-month target price by $2.00 to $7.00, on a P/E within the peer range. /A. Zino-CFA Note that even though WFR posted an EPS of 0.29 versus the 0.10 estimate, the stock did not get an upgrade, and as a matter of fact, took a big dive in price after the earnings announcement. The stock has recovered somewhat from that point and today is selling around 6.75, up a little over 1 percent. This value is very near the S&P 7 dollars a share target price. WFR's FY11 ends in December, therefore the 3rd quarter will close at the end of this month. Estimated earnings at this time is 0.16, much lower than the Q2 actual of 0.29. A summary of WFR from the S&P report is shown below. CORPORATE OVERVIEW. MEMC Electronic Materials, Inc. (WFR) is a global leader in the manufacture of silicon wafers. The company designs, manufactures and provides wafers and intermediate products for use in the semiconductor, solar and related industries. Its customers include virtually all of the world's major semiconductor device manufacturers, such as the major memory, microprocessor, and applications specific integrated circuit (ASIC) manufacturers, as well as the world's largest foundries. WFR's products include prime polish wafers, epitaxial wafers, test and monitor wafers, and siliconon- insulator (SOI) wafers. WFR's prime wafer is a polished, highly refined, pure wafer with an ultraflat and ultraclean surface. The majority of these wafers are manufactured with a sophisticated chemical-mechanical polishing process that removes defects and leaves an extremely smooth surface. WFR's epitaxial, or epi, wafers consist of a thin silicon layer grown on the polished surface of the wafer. The epitaxial layer usually has different electrical properties from the underlying wafer, which provides customers with better isolation between circuit elements than a polished wafer, and the ability to tailor the wafer to the specific demands of the device. WFR supplies test/monitor wafers to customers for their use in testing semiconductor manufacturing lines and processes. Although test/monitor wafers are essentially the same as prime wafers with respect to cleanliness, it has some less rigorous requirements, allowing WFR to produce some of the test/monitor wafers from the portion of the silicon ingot that does not meet customer specifications. A SOI wafer is a new type of starting material for the chip making process. SOI wafers have three layers: a thin surface layer of silicon where the transistors are formed, an underlying layer of insulating material, and a support bulk silicon wafer. Transistors built within the top silicon layer typically switch signals faster, run at lower voltages, and are much less vulnerable to signal noise from background cosmic ray particles. Through WFR's SunEdison business, the company is a leading solar energy installer in North America, and also provides financing services under long-term power purchase arrangements and feed-in tariff arrangements. Customers pay only for the electricity output generated by the solar system installed, avoiding the significant capital outlays usually associated with solar projects. In 2010, Suntech Power Holding and First Reserve Partnership accounted for 12% and 13% of total sales. No other customer comprised more than 10% of total revenues.