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To: Ian@SI who wrote (1489)	3/11/1998 10:31:00 AM
From: Ian@SI	Respond to of 2946

LB's comments on Yesterday's announcement... * This morning Silicon Valley Group preannounced that its 2Q March EPS would be 25% below Street expectations, or roughly $0.29 per share. Surprisingly, second half FY98 revenues will be 15-20% below first half revenues. * We are reducing our FY98 EPS estimate from $1.63 to $1.10. We are reducing our FY 1999 estimate from $2.10 to $1.50. We are reducing our one-year price target to $23 from $28. Our 2Q estimate goes to $0.29 from $0.35. * The company was expecting to ship some of its advanced Micrascan products to customers in South Korea this fiscal year. The financial and economic crisis there have caused a delay in orders for these systems. * We think the situation could worsen before it gets better. Some U.S. semiconductor manufacturers are now considering more cautious spending plans for 1998, and this could further slow demand for the company's products. * Our investment rating remains 3 (Neutral). We think a weak EPS outlook is already factored into the share price, but do not anticipate much appreciation in the shares until signs of a recovery emerge late this year.