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Technology Stocks : CYPRESS Semiconductor (CY) -- Ignore unavailable to you. Want to Upgrade?

To: jelrod3 who wrote (1617)	12/15/1997 7:07:00 PM
From: larry pollock	Read Replies (2) \| Respond to of 2694

I think TJ was sleeping on the job, read the attached obtained from Dow Jones: 12/15/97 Chip Maker Cypress Issues Warning, Plans To Exit Some Lines NEW YORK -(Dow Jones)- Cypress Semiconductor Corp., which makes specialized forms of memory chips, Monday warned results for the current quarter will fall well short of analysts' expectations and announced plans to exit certain businesses and close some plants. Shares of Cypress (CY) shed $68.8 cents, or 8%, to finish Monday's session at $7.875. Volume in the New York Stock exchange-listed stock was nearly 6.8 million shares, more than four times the daily average. Gruntal & Co. lowered its investment rating on Cypress to "hold" from "buy." Morgan Stanley downgraded Cypress to "outperform" from "strong buy." Cypress expects per-share earnings for the quarter ended Dec. 29 to come in between break-even and one cent. The mean estimate of seven analysts surveyed by First Call had been for earnings of around 10 cents per share. Just a week ago, Cypress said it was comfortable with Wall Street estimates and forecast revenue of between $152 million and $155 million. Now it expects revenue of between $140 million to $143 million. The San Jose, Calif.-based company also said 1998 earnings will come in below estimates, with Cypress now expecting 50 cents a share, compared with estimates for 65 cents to 70 cents a share. Cypress cited a shortfall in revenue from making chips for other companies, weak orders from their customers, and a $10 million shortfall in SRAM, or static random access memory, chip revenue because of a "timing problem in shipping by the quarter-end cutoff." Specifically, Cypress cited a dealy in boosting production of SRAMs at a Round Rock, Texas, plant. Cypress expects to catch up on SRAM shipments during the first quarter of 1998. Cypress concentrates on SRAM chips, a relatively high-end product in the market. SRAM chips, although faster than more common memory chips, are more expensive to manufacture. Cypress said its other divisions account for 56% of the company's sales and will show revenue growth compared to year-ago figures. But Cypress said the slowdown in the chip-production business will persist in 1998. Cypress said all the chips it makes for other firms are made in the Round Rock plant, which is operating under capacity. As long as that situation persists, the drag on profits will continue., the company said. Cypress said it will scrap a chipset business and close its Munich, Germany, motherboard business. Cypress will alo shut down an assembly and test operation in San Jose. Cypress said new products introduced by Intel Corp. made Cypress's chipset products outdated. The company also said it is exiting the EPROM chip business but will continue to serve current customers. EPROM is a type of memory chip widely used in cellular phones, pagers and other devices. Cypress said it will propose to expand a share-buyback program by two million shares at a board meeting Tuesday. Cypress also said the economic troubles in Asia are having a mixed effect on the company. Cypress said it has taken steps to guarantee that production at a Thai assembly-and-test operation won't be uninterrupted in the event that the local firm, Alphatec, becomes "unstable." As a contingency measure, Cypress said, it has set up a test floor in a separate facility in Bangkok. About 30% of Cypress's production passes through Alphatec. On the positive side, Cypress said manufacturing costs at Alphatec, as well as those at its other subcontractors in Asia and at its Manila plant, have dropped. Cypress said it ships 9% of its revenue to Japan and 10% to non-Japanese Asian sites. Some of the non-Japanese Asian business is subject to "demand correction," Cypress warned. Copyright (c) 1997 Dow Jones & Company, Inc. All Rights Reserved. 4:39 PM As stated above, Cypress was in agreement with analyst estimates merely one week ago. In Cypress's press release, the word "miscue" was used. Sounds like major blunders to me.