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From Briefing.com: 6:52PM Thursday After Hours prices levels vs. 4 pm ET: Buyers continue to flock to stocks in the after hours, despite the 1.4-1.9% move higher today. Upside earnings reports and quarterly outlooks from bellwethers like Microsoft (MSFT) have kept the rally going strong, particularly in tech. Presently, the Nasdaq 100 futures, at 1496, are 8 points above fair value, and the S&P futures, at 1140, are 1 point above fair value.

The below table details Microsoft's news, as well as other influential earnings reports of the nig

After Hours Mover % Change Move Reason for Move
Amazon.com (00C0) -3% Internet retailer beats the Reuters Research consensus EPS and revenue estimates in its Q1 (Mar) report; Issues in line Q2 (June) revenue guidance and raises its FY04 (Dec) sales outlook; Stock takes a bit of a hit, though, following today 7% rally off EBAY's report last night
Amgen (AMGN) +2% Biotech company tops the Street Q1 (Mar) EPS estimate by $0.02 on revenues that were lighter than expected ($2.34 bln versus the consensus of $2.36 bln); In response to rumors of price discounting that hit the market yesterday, Amgen says that there are 'modest price differences' between its Aranesp drug and competitors; Briefing.com recommended AMGN in a Mar 30 Story Stock
Broadcom (BRCM) +5% Communications chipmaker delivers Q1 (Mar) EPS of $0.29 on sales that increased 75% to $573.4 mln; On its call, Broadcom guides Q2 (June) revenues to approximately $631 mln (or up 10% sequentially) versus the consensus of $588.6 mln; Stock has dropped 5% since mid-Apr, and BRCM has recovered all of that - plus more - in today's action
Emulex (ELX) -7% Storage company delivers an in line Q3 (Mar) report, but warns for Q4 (June) - sees EPS and sales below Wall Street expectations; Briefing.com recently profiled a Raymond James initiation of coverage of ELX at an Underweight rating on In-Play; In the Apr 14 note, firm said that Emulex had 'no place to go but down after riding the high margin FC HBA highway'
Microsoft (MSFT) +5% World's largest software maker exceeds the Street's Q3 (Mar) EPS estimate by $0.05 and revenue estimate by 6%; Issues upside forecasts for Q4 (June), putting EPS at $0.28 and sales at $8.9-9.0 bln; Also gives a mixed view of FY05, indicating that revenue will fall short of current expectations but that earnings will surpass them; MSFT was highlighted as a 'cheap teck stock' in the WSJ today
PeopleSoft (PSFT) -3% Software name misses on EPS, revenues, and license revenues in its Q1 (Mar) report; On its call, management says some deals didn't close and slipped into Q2 (June); Says that EPS should be $0.20-0.22, revenues should be $675-695 mln, and license revenues should be $150-170 mln; The first two forecasts are toward the low-end of analyst estimates
Xilinx (XLNX) -2% After raising its Q4 (Mar) outlook twice, semiconductor company reports EPS that doubled and revenues that jumped 32%; Gross margins also expanded 290 basis points to 64.7%; For Q1 (Mar), Xilinx said it looked for a sequential revenue increase of 5-8%, implying a range of $424-436 mln and above the consensus estimate for $417.5 mln
Tomorrow, earnings reports will drop off significantly with only 22 companies scheduled before the open. March Durable Goods is the lone economic report scheduled for release.

For more detail on these, and other developments, be sure to visit our Stock Market Update and Daily Sector Wrap. -- Heather Smith, Briefing.com

6:43PM Chartered Semi beats by $0.04, ex items; guides above Q2 consensus (CHRT) 9.60 -0.01: Reports Q1 (Mar) earnings of $0.01 per share, ex items, $0.04 better than the Reuters Research consensus of ($0.03); revenues rose 119.9% year/year to $228.4 mln vs the $227.5 mln consensus. Co sees Q2 EPS of $0.01-0.05, Reuters consensus is a loss of $0.03 and revs $249-255 mln., consensus is $234 mln.

6:10PM Metrologic Inst beats by $0.04; guides for Q2 and Y04 (MTLG) 21.00 +1.68: Reports Q1 (Mar) earnings of $0.22 per share, $0.04 better than the Reuters Research consensus of $0.18; revenues rose 24.6% year/year to $39.7 mln vs the $39.5 mln consensus. Co sees Q2 (Jun) EPS of $0.17-0.19 and revs of $39.0-40.0 mln, Reuters consensus is $0.19 and $41 mln. Co also sees Y04 (Dec) EPS of $0.78-0.84 and revs of $163-168 mln, Reuters consensus is $0.80 and $166 mln, respectively.

5:32PM Broadcom guides revenues higher for Q2 (BRCM) 43.06 +2.26: -- Update -- On call, management says Q2 revenues are expected to increase 10% sequentially, suggesting revenues of $631 mln. The Reuters Research consensus calls for Q2 revenues of $588.6 mln. Gross margins in Q2 are expected to decline 50 basis points sequentially; Q1 gross margins were 50.6%.

5:09PM Vitesse Semi reports in line, ex items, guides Q2 in line (VTSS) 5.70 -0.16: Reports Q2 (Mar) pro forma net earnings of $0.01 per share, in line with the Reuters Research consensus of $0.01; revenues rose 47.0% year/year to $56.0 mln vs the $55.3 mln consensus. Co also guides, sees pro forma EPS of $0.02 (ex items), vs the R.R. consensus of $0.02, and revenues of approx $60.5 mln (based on sequential growth of 8%), vs an estimate of $60.4 mln.

4:56PM Micrel reports in line, guides Q2 revs above consensus (MCRL) 11.99 -0.28: Reports Q1 (Mar) earnings of $0.05 per share, in line with the Reuters Research consensus of $0.05; revenues rose 20.2% year/year to $61.3 mln vs the $62.0 mln consensus. Co also guides, sees Q2 revenues of $68-70 mln, vs an estimate of $65.4 mln.

4:52PM Integrated Silicon beats by $0.04 (ISSI) 15.69 -0.58: Reports Q2 (Mar) earnings of $0.10 per share, ex-itmes, $0.04 better than the Reuters Research consensus of $0.06; revenues rose 130.8% year/year to $51.5 mln vs the $48.8 mln consensus. Co notes it has $160.6 mln in cash/inv, which computes to roughly $4.39 per share, with no long term debt.

4:52PM Emulex reports in line, ex items, guides Q4 below consensus (ELX) 19.59 +0.04: Reports Q3 (Mar) non-GAAP earnings of $0.25 per share, ex items, in line with the Reuters Research consensus of $0.25; revenues rose 24.4% year/year to $99.0 mln vs the $100.9 mln consensus. Co also guides, sees non-GAAP Q4 EPS up to $0.25, vs the R.R. consensus of $0.26, and revenues of $100-103 mln, vs an estimate of $105.4 mln.

4:52PM Microchip beats by $0.02, beats on revs; guides above Q1 consensus (MCHP) 28.33 +0.58: --Correction-- Co reports Q4 (Mar) earnings of $0.22, $0.02 better than Reuters consensus of $0.20; revenues rose 20.1% year/year to $191.52 mln vs consensus of $185.77 mln. Co sees Q1 (Jun) EPS of approx $0.25 and revs of $205-207 mln, Reuters consensus is $0.21 and $193 mln, respectively.

4:38PM Integrated Device beats by $0.02, ex items (IDTI) 15.09 +0.09: Reports Q4 (Mar) non-GAAP earnings of $0.08 per share, ex items, $0.02 better than the Reuters Research consensus of $0.06; revenues rose 17.0% year/year to $94.5 mln vs the $93.6 mln consensus.

4:34PM UTStarcom to acquire Telos Tech (UTSI) : -- Update -- Co announces that it will acquire substantially all of the assets of Telos Tech, a provider of distributed mobile switching products for voice and data communication networks to rural, enterprise, and emerging wireless mkts. The transaction includes an initial cash consideration of $29 mln, and is subject to an additional payment of up to $19 mln based upon the achievement of certain rev milestones.

4:33PM Brooks Automation beats by $0.11, guides JunQ higher (BRKS) 18.05 -0.76: Reports Q2 (Mar) earnings of $0.24 per share, ex-items, $0.11 better than the Reuters Research consensus of $0.13, far better than guidance of $0.10-$0.15 at the start of the quarter; revenues rose 48.4% year/year to $138.0 mln vs the $123.4 mln consensus... For Q3 (Jun), co expects revs of $140-$150 mln and EPS, excluding restructuring charges, of $0.24-$0.29 vs consensus of $134.2 mln and $0.21.

4:32PM Western Digital beats by a penny (WDC) : Reports Q3 (Mar) earnings of $0.22 per share, $0.01 better than the Reuters Research consensus of $0.21; revenues rose 6.1% year/year to $749.0 mln vs the $729.9 mln consensus.

4:30PM Xilinx beats, ex items, guides Q1 revs, extends stock buyback plan (XLNX) 37.79 +0.57: Reports Q4 (Mar) earnings of $0.28 per share, which excludes multiple items, may not be comparable to the Reuters Research consensus of $0.25; revenues rose 32.0% year/year to $403.4 mln vs the $399.1 mln consensus. Co guides Q1, expects revenues to increase 5-8% sequentially while co's Board authorizes a stock repurchase whereby up to $250 mln of its common stock will be purchased in the open market; Board also declares a quarterly cash dividend of $0.05 per share. In touch with Reuters for clarification.

4:19PM Microsoft beats by $0.05, guides higher (MSFT) : Reports Q3 (Mar) earnings of $0.34 per share, excluding multiple charges, $0.05 better than the Reuters Research consensus of $0.29; revenues rose 17.1% year/year to $9.18 bln vs the $8.67 bln consensus. Company sees Q2 EPS of $0.28 vs consensus of $0.27 on revenues of $8.9-9.0 bln, consensus $8.86 bln

4:15PM Corning beats by $0.03, guides higher (GLW) : Reports Q1 (Mar) earnings of $0.08 per share, $0.03 better than the Reuters Research consensus of $0.05; revenues rose 13.1% year/year to $844.0 mln vs the $804.9 mln consensus. Company sees Q2 EPS of $0.07-0.09 vs consensus of $0.06 on revenues of $900-950 mln, consensus $838 mln.

4:14PM ISSI prelim $0.10, 4 cents ahead; revs $51.5 mln vs $48.75 mln consensus :

4:10PM TriQuint Semi beats by $0.01, guides Q2 in line, raises Y04 rev guidance (TQNT) : Reports Q1 (Mar) net of breakeven, $0.01 better than the Reuters Research consensus of ($0.01); revenues rose 25.4% year/year to $89.9 mln vs the $86.3 mln consensus. Co also guides, sees Q2 loss of $0.01 to profit of $0.01, vs the R.R. consensus of breakeven, and revenues of $90-92 mln, vs an estimate of $88.4 mln; sees Y04 revenues of $365-375 mln, vs an estimate of $364.4 mln and prior guidance of $340-355 mln.

4:09PM Broadcom beats by $0.03, ex items (BRCM) : Reports Q1 (Mar) earnings of $0.29 per share, ex items, $0.03 better than the Reuters Research consensus of $0.26; revenues rose 75.1% year/year to $573.4 mln vs the $562.4 mln consensus.

4:04PM Celestica beats by $0.05, ex items, guides Q2 above consensus (CLS) : Reports Q1 (Mar) adjusted net earnings of $0.02 per share, excluding restructuring charges, $0.05 better than the Reuters Research consensus of ($0.03); revenues rose 27.1% year/year to $2.02 bln vs the $1.87 bln consensus. Co also guides, sees adjusted Q2 EPS of $0.07-0.13 (ex items), vs the R.R. consensus of $0.01, and revenues of $2.15-2.35 bln, vs an estimate of $1.97 bln.

4:02PM Microsemi beats by a penny (MSCC) : Reports Q2 (Mar) earnings of $0.07 per share, in line with the Reuters Research consensus of $0.07 and a penny better than First Call consensus of $0.06; revenues rose 19.7% year/year to $57.7 mln vs the $57.4 mln consensus.

Close Dow +143.93 at 10461.20, S&P +15.86 at 1139.95, Nasdaq +37.28 at 2032.91: A stealth rally swept the market today as buyers came out of the woodwork around 11 ET and bid stocks steadily higher into the close...
A variety of reasons can explain the uptick, but the most logical are (1) a combination of short covering and buy programs when the indices demonstrated resiliency at early technical levels (e.g. the 50-day simple moving averages for the Nasdaq and S&P 500), (2) a slew of better than expected earnings reports (Altera, eBay, Merck, Qualcomm, Starbucks) that lent credibility to the recovery in corporate American, and (3) the idea that rising interest rates are well understood by most market participants, and the recognition that the Fed will raise slowly when it does start tightening... As a result, the market rallied across just about every industry group with only a handful (casino, department store) bucking the trend... Breadth figures were extremely favorable and up volume led down volume by a 4-to-1 margin at the NYSE... Economic data were mixed across the board and had little impact on trading...

Weekly initial claims were worse than expected at 353K versus the consensus estimate of 340K, and March PPI was stronger than expected at 0.5% versus the consensus estimate of 0.3%....NYSE Adv/Dec 2489/838, Nasdaq Adv/Dec 2061/1128

3:40PM QUALCOMM (QCOM) 68.58 +2.74: QCOM reported Q2 results after the close on Wednesday. The supplier of CDMA (code division multiple access) digital wireless communications solutions posted EPS of $0.53, excluding QSI (QUALCOMM Strategic Initiatives), on revenue of $1.216B (+19.5% Y/Y) vs. Reuters Research consensus at $0.48 on $1.184B and guidance of $0.48-0.50 on $1.19-1.21B.

QCT (CDMA Technologies) shipped 32MM MSM (Mobile Station Modem) phone chips (+14% Y/Y), most of which were 3G CDMA2000 1X, 1xEV-DO and WCDMA (UMTS). Business was supply constrained on MSM5100 and MSM5500 chips; at less than the 15-16 weeks required by manufacturers and distributors; expect imbalance to correct over the next two quarters.

Shipped CSM infrastructure chips for 3G CDMA2000 1X and 1xEV-DO to support approximately 5.7MM equivalent voice channels (+280% Y/Y). CSM infrastructure chips currently support 8-32 voice channels per chip.

QWBS (Wireless Business Solutions) shipped approximately 11,200 (+33.3% Y/Y) OmniTRACS units and related products, bringing cumulative total to over 511,000 units.

QTL (Technology Licensing) revenue increased due primarily to greater phone and infrastructure equipment sales by licensees. WCDMA royalties account for 12% of royalty revenue.

The following table shows sales, gross margins and Y/Y change by revenue segment, excluding reconciling items except in company totals. Segment Revenue Gross Margin Operating Margin
$ in MM % Sales Y/Y Growth in % Y/Y Variance in % Y/Y Variance
Products--CDMA Technologies 711.257 59% 10.0% 59.1% 379 36.3% 198
Products--Wireless & Internet Group 144.627 12% 13.6% 2.7% (455)
Licensing and Royalty 390.257 33% 50.0% 100.0% -- 92.7% 185
Total 1,215.648 100% 19.6% 72.4% 596 47.1% 558
Gross margin increased 596 bps Y/Y to 72.4%. Operating margin increased 558 bps Y/Y to 47.1%.

Guided for Q3 EPS, excluding QSI loss of $0.02, of $0.48-0.50 on revenue of $1.264-1.301B (+41-44% Y/Y) vs. consensus at $0.37 on $1.047B; and F04 EPS of $1.93-1.98 on $4.846-4.961B (+26-29% Y/Y). Expect Q3 ASPs (average selling prices) on CDMA handsets to be flat at approximately $194, and to ship 33-35MM MSM phone chips; to ship 152-160MM in C04 vs. guidance of 138-147MM.

Shares are, based on our inverted EVA / DCF model, priced for sustained lower 30% revenue growth assuming steady Y/Y improvement to 54-55% operating margin.

The following table shows price multiples and Y/Y growth rates for QCOM compared against the semiconductor components and communications equipment groups. Company *P/SG Ratio **P/OPG Ratio P/S Y/Y Revenue Growth
TTM 2004E 2005E TTM 2004E 2005E
Qualcomm (QCOM) 6.4 23.7 12.6 11.7 10.7 10.8% 14.6% 8.7%
Infineon (IFX) 0.9 (32.0) 1.3 n/a 18.2% n/a
STMicroelectronics (STM) 1.9 60.3 2.6 2.3 2.0 16.2% 21.5% 12.9%
Texas Instruments (TXN) 2.7 28.6 4.5 3.7 3.2 20.9% 31.7% 15.8%
Motorola (MOT) 1.1 34.6 1.5 1.3 1.2 9.0% 29.4% 6.0%
LM Ericsson (ERICY) 2.8 (43.6) 3.2 2.9 2.7 (19.2%) 9.3% 8.0%
Nokia (NOK) 1.4 9.9 2.0 2.0 1.8 (1.9%) (3.2%) 8.2%
Semiconductor Components 2.9 42.5 4.6 n/a 14.8% n/a
Communications Equipment 1.7 36.8 2.2 (5.0%)
Blended 2.1 38.8 3.0 1.1%
*P/SG Ratio: Trailing 12 month (Price / Sales) / Growth ratio as of April 16, 2004.
**P/OPG Ratio: Trailing 12 month (Price / Operating Income) / Growth ratio as of April 16, 2004.

Results reflect building momentum as carriers, including KDDI, mmO2 (OOM 17.98 -0.02), Orange, T Mobile and Verizon Communications (VZ 37.94 +0.25), roll out new services. Trends favor QCOM and we would expect the company to continue to deliver strong results over the coming quarters but revenue growth expectations are close to what industry fundamentals can sustain over the long-term given current expectations for market growth, and operating margin expectations suggest peak performance with little room for upside. Management guided for QCT operating margin of approximately 32% for F04.

ASP compression is not a near-term concern in view of management guidance for stable ASPs. But as noted in the Q1 review (Story Stocks January 22, 2004), competition is heating up from Texas Instruments (TXN 27.85 -0.49) and STMicroelectronics (STM 22.88 +0.51), who have co-developed a standard cdma2000 1xEV-DV (1xEvolution for Data and Voice) solution. The two firms began sampling chips in December 2003, and expect products in the market by Christmas. TXN has access to QCOM's portfolio of CDMA patents under a technology cross-licensing agreement.--Ping Yu, Briefing.com

10:16AM Juniper Networks (JNPR) $25.63 -0.20: Juniper published Q1 results after the close on Wednesday. The designer of networking equipment published EPS of $0.08 on revenue of $224.053MM (+42.5% Y/Y) vs. Reuters Research consensus at $0.08 on $215.67MM.

Booked revenue on 1,318 units and shipped 23,288 ports reflecting strength in high-end. High-end products account for 41% of sales; mid-tier 25%; and low-end 34%. Revenue was approximately evenly split between core and access products. North America was 46% of sales; Asia-Pacific 28%; and Europe 26%.

NetScreen Technologies, acquired on April 16 (refer to February 29, 2004 Story Stocks for details), posted EPS of ($0.03) on $93.5MM (+60.4% Y/Y). Non-GAAP EPS of $0.15 excludes amortization of purchased intangibles and deferred compensation and merger related costs of $15.3MM.

Gross margin increased 599 bps Y/Y to 67.0%. Operating margin increased 1,517 bps Y/Y to 22.8%.

The following table shows sales, gross margins and Y/Y change by revenue segment. Segment Revenue Gross Margin
$ in MM % Sales Y/Y Growth in % Y/Y Variance
Product 194.184 87% 43.7% 70.9% 665
Services 29.869 13% 35.6% 41.6% 48
Total 224.053 100% 42.5% 67.0% 599
Guided for Q2 EPS of $0.03-0.04 on $270-275MM under purchase accounting method, which includes only 75 of 90 days of Netscreen Technologies results in Q2. Infrastructure products & services revenue expected to be approximately $235MM; security products & services revenue to be $35-37MM; and blended gross margin to be 64-65%.

EPS would be 0.10 on $335-340MM and gross margin at 68-69% assuming a full quarter of Netscreen results under pooling of interests method. Reuters Research prints consensus EPS at $0.09 on $225.60MM.

H2 EPS forecast to be $0.20-0.21 on $705-720MM, excluding $15MM of service revenue due to purchase accounting. EPS would be $0.22-0.23 on $720-735MM under pooling.

Shares trade at a premium to industry average and are, based on our inverted EVA/DCF model, priced for sustained lower 30% revenue growth assuming steady Y/Y improvement to 33-34% operating margin.

The following table shows price multiples and Y/Y growth rates for JNPR compared against peers in the communications equipment group. Company *P/SG Ratio **P/OPG Ratio P/S Y/Y Revenue Growth
TTM 2004E 2005E TTM 2004E 2005E
Juniper Networks (JNPR) 6.8 126.5 13.3 10.9 9.1 32.1% 33.3% 20.2%
Cisco Systems (CSCO) 4.5 21.9 7.8 7.1 6.3 3.2% 15.4% 12.7%
Lucent (LU) 1.9 68.0 2.0 1.9 1.8 (13.0%) 5.0% 6.0%
Nortel Networks (NT) 1.8 60.5 2.4 2.1 1.9 (7.2%) 10.4% 10.7%
Communications Equipment 1.7 36.8 2.2 (5.0%)
*P/SG Ratio: Trailing 12 month (Price / Sales) / Growth ratio as of April 16, 2004.
**P/OPG Ratio: Trailing 12 month (Price / Operating Income) / Growth ratio as of April 16, 2004.

JNPR is benefiting from the budding recovery in carrier capital spending coupled with strong government spending. As well, the transition to a converged data and voice (IP/MPLS) network is gaining momentum, and increasing demand for Juniper's edge and core products. But growth expectations baked into shares reflect improving sector fundamentals and significant improvement in operating results.

JNPR shares are down over 10% since the Q4 review (Story Stocks, January 16, 2004), when we commented that we would wait for a 20-25% pull-back before initiating a new position. We would instead focus on Cisco Systems(22.12 -0.25), which offers modest upside at current level. Refer to CSCO's Q2 review, Story Stocks, February 4, 2004, for analysis and summary. Reuters Research prints Q1 consensus EPS at $0.18 on $5.545B (+20.1% Y/Y). CSCO reports after the close on May 11.--Ping Yu, Briefing.com

9:00AM KLA-Tencor (KLAC) 48.32 KLA-Tencor reported Q3 results after the close on Wednesday. The provider of process control and yield management solutions for semiconductor and microelectronics manufacturers posted EPS of $0.33 on revenue of $389.772MM (+28.1% Y/Y) vs. Reuters Research consensus at $0.29 on $379.54MM.

Orders for wafer inspection, metrology and reticle inspection was strong. KLAC exited the quarter with approximately $79MM in shippable backlog.

Product revenue increased 30.9% Y/Y to $312.645MM (80% of sales). Service revenue increased 20.0% Y/Y to $77.127MM (20% of sales). The U.S. accounts for 32% of orders; China, Korea and Singapore 27%; Taiwan 16%; Japan 14%; Europe 11%.

Gross margin increased 774 bps Y/Y to 56.2% on higher capacity utilization and cost reductions. Operating margin increased 1,410 bps Y/Y to 22.5%.

Guided for Q4 EPS of $0.43-0.45 on revenue of $440-450MM (+42.7-46.0% Y/Y) vs. consensus at $0.43 on $457.79MM. Orders could be up 10% or down as much as 15% depending on the timing of two large fab orders.

Uncertainty in timing of orders reflect the lumpy nature of the business, and the relatively small size of the process control / yield management market relative to the total market for semiconductor capital equipment. Process control equipment account for approximately 10-15% or $3.5-6B of the $35-40B semiconductor capital equipment market.

KLAC shares are, based on our inverted EVA/DCF model, priced for sustained lower 30% revenue growth assuming stable 22-23% operating margin.

The company is benefitting from an increase in spending on process control equipment as semiconductor manufacturers attempt to maximize yield and build out new fabs in a rising demand environment. As well, the transition to advance technologies require more process control tools to integrate the different architectures and materials. But the growth expectations priced into shares imply KLAC is a $20-21B revenue company at the end of the forecast period, and is clearly not sustainable.

The following table shows price multiples and Y/Y growth rates for KLAC compared against the semiconductor equipment group. Company *P/SG Ratio **P/OPG Ratio P/S Y/Y Revenue Growth
TTM 2004E 2005E TTM 2004E 2005E
KLA-Tencor (KLAC) 5.7 68.2 7.0 6.4 4.3 2.4% 12.8% 49.1%
Applied Materials (AMAT) 5.2 (369.8) 6.8 4.4 3.6 (2.7%) 74.4% 22.7%
ASM International (ASMI) 1.0 56.1 1.6 1.2 0.9 12.1% 34.7% 27.6%
Semiconductor Equipment 2.9 (244.9) 3.4 (10.9%)
*P/SG Ratio: Trailing 12 month (Price / Sales) / Growth ratio as of April 16, 2004.
**P/OPG Ratio: Trailing 12 month (Price / Operating Income) / Growth ratio as of April 16, 2004.

KLAC, like many of its peers, trade at levels that price in unsustainable revenue growth and operating margin given the highly cyclical and lumpy nature of the industry. We would focus on ASM International (ASMI 21.93), which has one of the broadest product portfolios, and despite having risen over 28% since we first spotlighted the company on Tech Stocks page (October 14, 2003), remains one of the most attractively priced names within the group.--Ping Yu, Briefing.com

http://biz.yahoo.com/mu/story.html