"08:30 ET Deutsche Securities cautious on semi equipment group : Deutsche Securities sees a number of issues continuing to weigh on the semi equipment group for at least the next several months; key issues are: 1) a high likelihood that many co's miss Q3 order guidance; 2) checks suggest continued deterioration in Q4 forecasts provided by large equipment co's; 3) believes 2003 will be the year of 300mm, but likely not until 2H03; and 4) valuation analysis suggests there could easily be 30% downside in many names. Trims LTXX 2002 est to ($0.82) from ($0.72) and 2003 to $0.11 from $0.40 (both above consensus)."
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marginnayan....
I am shocked that there could be weakness showing up in the equipment sector <vbg>. I expect that the news for the group will do little but get worse, as they continue to get pushouts and cancellations on the orders placed in anticipation of a strong economic upturn. KLIC this morning finally admitted to receiving push-outs, and I believe there are a number of them in the works around the sector. (the difference between a "push-out" and a cancellation is semantics. Often they are identical) Valuations in the group are still very high, for the most part, with a good deal of risk to the downside.
From my checks, the only chip areas doing well are the power chips, with ONNN, IRF, and a few others (like assembly company CHPC) still running at 80-90% capacity.
This morning's drop in the LEI was the largest since 09/11, and I am convinced that the second leg of the double dip is here and will be with us for a good while. New data out of Germany suggests that Europe is not far behind.
I could always be wrong, though.
mlsoft
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