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Technology Stocks : LSI Corporation -- Ignore unavailable to you. Want to Upgrade?

To: Tony D. who wrote (12864)	6/4/1998 9:31:00 PM
From: Anthony Wong	Read Replies (3) \| Respond to of 25814

Bloomberg: LSI Shares Rise on Optimism for Sales to Networking Companies Bloomberg News June 4, 1998, 1:47 p.m. PT LSI Shares Rise on Optimism for Sales to Networking Companies Milpitas, California, June 4 (Bloomberg) -- LSI Logic Corp. shares rose 14 percent on optimism the chipmaker will benefit from the fast-growing market for semiconductors used in networking equipment to link computers to the Internet. LSI rose 2 15/16 to 23 15/16 in trading of 3.6 million, almost 2 1/2 times the three-month daily average. Earlier, the shares touched 24, their biggest one-day rise in a year. For the past 10 years, the semiconductor industry has focused on making faster microprocessors, the ''brains'' of PCs. Now, the connections between PCs and the Internet -- known as bandwidth -- aren't fast enough to take advantage of speedy processors from Intel Corp. and others. That's an opportunity for LSI, the largest maker of chips for networking equipment. ''Companies (such as LSI) that supply semiconductors to communications equipment makers find themselves in the position that PC microprocessor makers were in a decade ago,'' wrote influential analyst Thomas Kurlak at Merrill Lynch & Co. in a note to investors. Today, he raised his rating on LSI to ''accumulate'' from ''neutral.'' LSI is in a good position to get more business from Cisco Systems Inc., Intel, Lucent Technologies Inc. and other makers of computer networking gear. LSI has a vast library of chip designs and has expertise in making so-called custom logic chips. Milpitas, California-based LSI is now the largest supplier of chips to the networking and telecommunications market, according to market researcher Datacom. Kurlak, known for his mercurial calls on chip makers such as Intel, estimated LSI gets about $470 million, or 34 percent of its revenue, from selling to these markets. Because of the move to sell more chips to companies that make arcane devices known as routers, hubs and switches, Kurlak wrote in his note that LSI's data-communications revenue will rise by 25 percent to 30 percent annually over the ''longer term.'' He is forecasting LSI to earn $1.00 a diluted share in 1998 and $1.55 diluted in 1999. Consensus earnings estimates for LSI are for $1.08 a diluted share in 1998 and $1.55 diluted in 1999, according to analysts surveyed by IBES International Inc. On April 23, LSI reported first-quarter profit fell 21 percent, hurt by lower prices for chips that are used in video games, mobile phones, computers and other devices. Net income fell to $30.4 million, or 22 cents a diluted share, from $38.4 million, or 28 cents, a year ago. The results matched the 23 cents forecast by analysts. Revenue rose 5.3 percent to $324.9 million. If LSI's revenue and profits rise, it could reverse a slump in the company's stock price. LSI has declined 38 percent in the last 12 months, compared with a 14.7 percent fall in the Philadelphia Semiconductor Index and a 30 percent rise in the Standard & Poor's 500 Index during the same time period. --Duncan Martell in the San Francisco newsroom (415) 912-2993/pkc