Sector Watch: Semis Trade Mostly Lower After Warning, Research Note
Another dose of negative news has the semiconductor sector headed for a down day, as a profit warning and a less-than-confident analyst's note left the majority of chipmakers trading lower.
Most of the sector lost ground by midday, as reflected in the
Philadelphia Stock Exchange Semiconductor Index
, or the SOX. The index slipped 2% by noon, while the
Dow Jones U.S. Semiconductor Index
fell 1.7%.
In a research note this morning,
Goldman Sachs
analyst Terry Ragsdale wrote that "the industry may be looking at another 20% decline seq. in 2Q. This tends to confirm that last week's preannouncements from
Altera
(ALTR) - Get Report
and
Integrated Device Technology
(IDTI) - Get Report
were not company-specific and implies a downward bias for semiconductor news flow and stock prices near term."
Altera lowered its revenue guidance last Thursday. The stock gained slightly Friday, but fell today, losing 1.9% to $24.67.
Xilinx
(XLNX) - Get Report
, a direct competitor of Altera, lost 1.6% today to $41.14.
Cypress Semiconductor
(CY) - Get Report
warned this morning that its second-quarter earnings would likely be between break-even and 2 cents a share. Analysts on average expect the company to earn 2 cents. The company also reduced its revenue expectations to a range of $175 million to $185 million, down from $262 million in the first quarter. In the same period last year, Cypress earned 50 cents a share on revenue of $300.1 million.
The stock edged higher today, gaining 1.7% to $21.97.
TheStreet.com's
Jim Cramer
examined in a
separate column why Cypress may be moving up.
Other stocks to the downside included
Advanced Micro Devices
(AMD) - Get Report
, which dropped 3.2% to $28.65. Microprocessor maker
Intel
(INTC) - Get Report
lost 1.7% to $28.25, while
Micron Technology
(MU) - Get Report
fell 1.9% to $38.47. Graphics-related chip producer
Nvidia
(NVDA) - Get Report
lost 1.9% to $88.80 today, and
Texas Instruments
(TXN) - Get Report
slipped 0.6% to $34.05.
In addition to the sector update from Goldman Sachs today, another of the firm's analysts put out a report on
Broadcom
(BRCM)
, lowering the company's estimates "to reflect our belief that the ongoing enterprise and cable market inventory corrections are likely to cause the company to miss our previous estimate of a 23% sequential decline."
Nathaniel Cohn reduced his forecast to a loss of 20 cents a share from a loss of 4 cents a share for fiscal 2001. The analyst also cut his projection for 2002 to a profit of 20 cents a share from 30 cents a share. But the stock traded higher, gaining 0.9% to $34.07.