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Technology Stocks : Intel Corporation (INTC) -- Ignore unavailable to you. Want to Upgrade?

To: TTOSBT who wrote (58035)	6/15/1998 8:41:00 PM
From: VICTORIA GATE, MD	Respond to of 186894

TTOSBT re<.Michael Murphy was very confident on INTC for Q2. > thanks I was confident on INTC Q2 for last 3 weeks Hold on very share intel stock vg

To: TTOSBT who wrote (58035)	6/15/1998 11:40:00 PM
From: Jacob Snyder	Respond to of 186894

Re: Michael Murphy: look at the date. Then read the article. Then remember what happened afterward: NY Times February 15, 1996 Excess Inventory of Chips Seen as Mixed Signal By LAWRENCE M. FISHER SAN FRANCISCO -- After four years of double-digit growth, the semiconductor industry is asking whether it can defy gravity much longer. The answer is far from certain, considering the conflicting fortunes of two bellwether companies. Late Tuesday, Cirrus Logic Inc. forecast a net loss for its fourth quarter, which ends on March 30, and revenues lower than those in its third quarter. Its shares plunged $3.625 Wednesday, or 15.6 percent, to $19.625 on the Nasdaq. The company makes a wide variety of chips. On the other hand, Applied Materials Inc., the leading producer of equipment for making semiconductors, announced record results late Tuesday for the first quarter, ended on Jan. 28, and said that orders remain strong. Shares of Applied Materials rose 62.5 cents to $39 in Nasdaq trading. Applied Materials said that first-quarter net income rose 161 percent to $172 million, or 93 cents a share, from $65.8 million, or 38 cents, last year. Revenue also more than doubled to $1.04 billion from $506.1 million. The divergent reports came just days after the Semiconductor Industry Association reported that its main indicator of business conditions dropped to an unexpected five-year low in January. That indicator, called the book-to-bill ratio, declined to 0.93, meaning that for every $100 worth of chips shipped, only $93 worth was ordered. That indicated a slowdown in sales, the trade organization said. Some analysts said Wednesday that the conflict between the reports was not meaningful, because Cirrus Logic and Applied Materials are in such different businesses. Cirrus makes chips for PCs, and is directly affected by slower-than-expected PC sales. Applied Materials supplies the equipment to make chips, which it sells far in advance of the chip production and is therefore less influenced by short-term cycles. "The economics driving the semiconductor equipment companies has almost nothing to do with the semiconductor companies," said Michael Murphy, publisher of the California Technology Stock Letter. Equipment purchases "have much longer lead times, and are driven in large part by the need to upgrade process technology," Murphy said. Chip makers need new equipment "to get into the 21st century, and they are not about to hold back because the price of memory has fallen." But the projected loss at Cirrus and the decline in the book-to-bill ratio are important, Murphy said, although he said that he suspects the latter was distorted by the chip association's methodology. Slower PC sales in the final quarter of last year led to excess inventory, he said. "It hurt the December quarter, and will hurt the March quarter some, but I think it's about over," he said. "We're buying the stocks, wherever it makes sense," said Murphy, who also runs investment portfolios. But Rick Whittington, an analyst with the Soundview Financial Group, took a bearish view, saying that Applied Materials's healthy order rate now would only cause excess chip capacity in the years to come.