Semiconductor Stocks Rise on September Revenues
Semiconductor stocks moved upward sharply Tuesday on news of a report by the Semiconductor Industry Assn. that shows a 4.2% increase in industry revenues in September compared with August. Sales in September totaled $10.22 billion, according to the report, which will be released today.
Santa Clara-based Intel Corp., the top maker of microprocessors, rose $4.44 to close at $94.81 on Nasdaq. Micron Technology, a leading memory-chip manufacturer, gained $3.56 to close at $43.75 on the NYSE. Advanced Micro Devices Inc. of Sunnyvale gained $1.69 to close at $25.13 on Nasdaq, a 7% rise. Sunnyvale-based National Semiconductor Corp. rose $1.13 to close at $13.25 on the NYSE. Semiconductor equipment manufacturers also shared in the gains.
Analysts called the report another sign that the global chip industry is finally rising out of its 2 1/2-year slump but cautioned against undue enthusiasm.
“If that’s what the market reacted to, it’s foolishness,” said Mel Thomsen of MicroDesign Resources, a research firm in Sebastopol, Calif. He attributed part of the increase to seasonal demand for PCs. “September is always a strong month, and August is always a weak month.”
In September, the chip industry begins to benefit from PC manufacturers building inventories for the holiday sales season.
Thomson noted all the regional markets showed increases--including a hopeful, though modest, rise in Japan. But the industry is still down 13.5% year over year.
“Now we’re on the upside, but the up-slope is going to be gradual for the next couple of years,” he said.
The report represents one of a series of positive signs for the industry, including Intel’s better-than-expected financial results in the last quarter and an uptick in memory-chip prices.
“People are underinvested in this area,” said Jonathan Joseph, an analyst with NationsBanc Montgomery Securities in San Francisco. “They are looking for stocks that can have a nice move before the end of the year.”
“People are beginning to believe that it won’t get any worse,” agreed analyst Nathan Brookwood of Insight 64 in Saratoga, Calif.
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California Earnings
A sampling of companies reporting quarterly earnings Wednesday, ranked by year-over-year growth, and companies due to report today, ranked by analysts’ forecast change in earnings per share (EPS) from the year--ago quarter, compiled by First Call:
Reporting Wednesday
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Pct. above/ 1997 Ticker Consensus Actual below 3rd-qtr. Company symbol EPS EPS estimate EPS PacificCare Health PHSYB $1.18 $1.38 +17% $0.67 Cisco Systems CSCO 0.33 0.34 +3 0.26 Alexandria Real Est. ARE 0.60 0.62 +3 0.48 Pacific Gulf Prop. PAG 0.55 0.58 +5 0.49 Rockwell Intl. ROK 0.64 0.67 +5 0.79 Zenith National Ins. ZNT 0.34 0.27 -21 0.44
Year- over-year Company % growth PacificCare Health +106% Cisco Systems +31 Alexandria Real Est. +29 Pacific Gulf Prop. +18 Rockwell Intl. -15 Zenith National Ins. -39
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Reporting Today
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Ticker Consensus Year-ago Predicted Company symbol EPS estimate quarter pct. chg. DeCrane Aircraft DAHX $0.35 $0.26 +35% ViaSat VSAT 0.17 0.15 +13 Sola International SOL 0.34 0.46 -26
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Note: Year-over-year growth and percentage changes are based on earnings-per-share figures and may differ from percentage changes based on total profit.
