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Technology Stocks : Cohu, Inc. (COHU) -- Ignore unavailable to you. Want to Upgrade?

To: Henry D who wrote (964)	9/30/1998 11:58:00 PM
From: KLINVESTOR	Respond to of 7838

HenryD, Margins for Cohu would not be linear since they have a fair amount of fixed operating costs. The 25 cent earnings estimate probably is not out of alignment considering the incredible dropoff in orders for semi-equipment. I don't think many would have projected this kind of order dropoff. On the positive side though anytime this kind of cutback in capital expenditures occurs it usually will precede a period of undercapacity coming. Since semi-companies have so radically cut back their capital expenditures they will probably be caught unprepared for the next big surge in semi-demand. When ever that occurs Cohu will probably be prepared to reap the benefits of the next expansion. Their larger U.S. competitors like ATRM and ASEC look like they are history. I can not imagine why a semi-company would use them at present since their ability to provide support after purchase in the future is very questionable since neither of them may be around for long given their weak finances. Good luck!