EPS & Earnings ... Hits & Misses

[madrose1]

* VSEA $57-$70-$69 beats by $0.03, beat on revs; guides Q3 above consensus; CFO says exploring geographic alternatives (57.00 +0.64) : Reports Q2 (Mar) earnings of $0.69 per share, $0.03 better than the Reuters Estimates consensus of $0.66; revenues rose 41.8% year/year to $241.8 mln vs the $239.1 mln consensus. Co issues upside guidance for Q3, sees EPS of $0.89-0.98 vs. $0.68 consensus; sees Q3 revs of $271-286 mln vs. $240.75 mln consensus. Co CFO commented, saying "We are exploring alternatives with respect to reorganizing the Company to better align our processes with the geographic location of our customers and suppliers. It is expected that over the long-term, the Company will benefit from significant economic efficiencies, however over the next few quarters, our effective tax rate could increase materially depending on the extent and timing of the reorganization."

Stifel Nicolaus upgrades Varian Semiconductor Equipment Associates (VSEA 55.00) to Buy from Hold and sets a $65 tgt, based on their view that a fundamental bottom is near, Varian will outgrow the industry average in '08 and likely beyond, the influx of volume orders from its market share wins over the past few years and an enhanced margin profile... Stifel Nicolaus upgrades KLA-Tencor (KLAC 54.22) to Buy from Hold and sets a $67 tgt, based on their view that a fundamental bottom is near, a sustained order flow to meet the production needs for leading edge manufacturing and an aggressive use of its cash through acquisitions and buybacks.