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Technology Stocks : Atmel - the trend is about to change -- Ignore unavailable to you. Want to Upgrade?

To: cc rogers who wrote (8566)	7/5/1998 10:53:00 AM
From: vibaby	Read Replies (1) \| Respond to of 13565

From Al Frank's Prudent Speculator: We have pruned our high valuation to $29 for Atmel Corp (ATML - $13.63) after the maker of high performance non-volatile memory and logic integrated circuits using proprietary CMOS (complementary metal-oxide semiconductor) technologies announced a major corporate restructuring and issued an earnings warning late today. Atmel will cut 10% of its workforce in response to continued weakness in the semiconductor market, and in particular EPROMs and Flash memory products. The company will take a $70 million pre-tax charge in the second quarter. CEO George Perlegos said "industry overcapacity has not yet abated, and Atmel's inventory levels are already high." The company also revealed that second quarter revenue will be 10% higher than the $260 million posted in the first quarter, but with a high fixed cost base, operating earnings will be essentially breakeven as gross margins are negatively impacted. While we expect ATML to open lower tomorrow as earnings estimates had exceeded $.20 a share, we continue to recommend its purchase with a reduced buy limit of $14.50. Already pummeled from a 52-week high of $39, Atmel now trades for a historically low 140% of sales and 175% of book value and Mr. Perlegos claims "we have excellent products and opportunities with leading companies in the telecommunications and consumer end markets."