SAN JOSE, Calif. - Several chip and equipment firms-including Cree, Disco, DNS, Nikon and Nvidia-have recently reported their results. Here's what analysts are saying about the numbers:
Cree this week announced record revenue of $264.6 million for its fourth quarter of fiscal 2010, ended June 27, 2010. This represents a 79 percent increase compared to revenue of $148.1 million reported for the fourth fiscal quarter last year and a 13 percent increase compared to the third quarter of fiscal 2010.
GAAP net income for the fourth quarter increased 445% year-over-year to $52.8 million, or $0.48 per diluted share, compared to GAAP net income of $9.7 million, or $0.11 per diluted share, for the fourth quarter of fiscal 2009.
Hans Mosesmann, an analyst with Raymond James & Associates Inc., said: ''Cree’s execution was very clean with June quarter sales coming in at $264.6 million (up 13 percent q/q) vs. our $260 million (up 11 percent q/q) estimate and consensus of $264 million (up 13 percent q/q).
The Street is likely set for some disappointment regarding Cree’s relatively tepid outlook given many quarters of 'beat and raise' metrics. Cree indicated that general lighting demand continues to be strong and channel inventories are benign. However weakening LED TV demand trends along with a seasonal Europe is impacting its growth prospects for the September quarter.''
Dainippon Screen Manufacturing Co. Ltd. (DNS)
Posted sales of 51.4 billion yen in the quarter, up 97.7 percent from a year ago. Posted a net of 3.9 billion yen, from a loss of 2.6 billion yen a year ago.
David Rubenstein, an analyst with MF Global, said: ''Sales and earnings were extremely strong. SPE (Semiconductor production equipment) should now grow by 76 percent year-over-year in FY3/11, a large upwards revision. Foundry capex was robust, while memory capex strength was also prominent. LCD equipment sales forecast was kept virtually the same for this year. There might be some timing issues in LCD plant construction in China.''
Posted sales of 24.1 billion yen in the quarter, up 159.9 percent from a year ago. Posted a net of 2.8 billion yen, from a loss of 902 million yen a year ago.
David Rubenstein, an analyst with MF Global, said: ''Disco results for Q1 were inline. Full year and 1H forecasts were revised up, higher than expectations. At (company) meeting, the tone was slightly positive, although some investors focused on an imminent peak in orders in the 2H of this year. DNS mentioned that Q2 and Q3 look positive for sales trend, but they are rather cautious about Q4 and beyond.
Dicing tools are 80 percent of Disco’s precision equipment, mainly for semiconductor applications. Dicing tools, including LED laser dicers, are the main driver of growth this year. Blade dicers are 70 percent of total dicers and growth for this year was raised to 90-100 percent growth from 40-50 percent previous growth assumption.
Laser dicers are 30 percent of dicing sales and are mainly LED dicers (70 percent LED). Growth for laser dicers was also raised to 80-90 percent from 60-70 percent. Consumables (dicing blades, grinding saws, etc.) forecast is unchanged at 10 percent growth this year. Market share in laser dicers for LEDs is extremely high, and thus Disco is rather unaffected by any price pressures in LED chips.''
The precision equipment business posted sales of 40.3 billion yen in the quarter, up 13 percent from a year ago. Posted an operating loss of 600 million yen, from an operating loss of 10.1 billion yen a year ago.
David Rubenstein, an analyst with MF Global, said: ''IC stepper sales increased to 10 units from 7 units last year, which allowed for better than expected profitability in the division. OP loss was reduced to minus 1 percent margin, a large improvement from minus 10 percent OP margin last quarter and minus 36 percent last year in Q1. The company indicated that it is making good headway at the foundries in leading edge ArF immersion tools, which had been one of its weak spots.
LCD stepper units rose sharply from a very low base last year to 14 units from 3 units last year. We gathered that the order trend in LCD steppers is also strong and over plan. Given the increase in order trend and unit projections for both IC and LCD steppers, Nikon raised its full year revenue forecast to 220 billion yen from 210 billion yen. Given the high volume of high priced ArF immersion steppers to be booked in the 2H, we believe that this OP forecast is conservative.''
Reported a net loss in accordance with generally accepted accounting principles (GAAP) for the second quarter of $141 million, or 25 cents per share, wider than the GAAP net loss of $105.3 million that the company reported in the year-ago quarter. In the previous quarter, Nvidia posted a GAAP net income of $137.6 million. Sales for the second quarter totaled $811.2 million, down 19 percent from the previous quarter and down 4.5 percent from the year-ago quarter.
Craig Berger, an analyst with FBR, said: ''Nvidia reported 2Q results that were in line with its preannouncement, but also demonstrate continuing challenges.
For the positives: (1) Nvidia's Quadro workstation GPUs grew another 13 percent QOQ; (2) Nvidia's gross margins would have bested guidance without its large excess inventory write-down; and (3) Tegra shipments likely grew about 70 percent QOQ to $15–$20 million in 2Q. For the negatives: (1) Nvidia likely lost GPU share in notebooks and desktops; (2) macro-driven demand weakness impacted GPU attach rates in Europe and China; (3) Nvidia still has much chipset exposure that should atrophy away in 2011–2012; (4) netbooks are taking share from PCs, which could drive a content hit for Nvidia; and (5) Intel's integrated CPU/GPU (Sandybridge) and AMD's Fusion (Ontario and Llano) should take GPU share.
Nvidia guided 3Q sales to grow 3–5 percent quarter-over-quarter ($844 million mid-point), worse than the Street's $884 million, as share losses, macro-driven demand weakness, and chipset atrophy continue to weigh.''
Hans Mosesmann, an analyst with Raymond James & Associates Inc., said: ''Guidance for the October quarter calls for sales up 3-5 percent, slightly below our prior $850 million estimate, based on market share gains in the higher-end gamer GPU segment, enterprise workstation demand (Quadro), and emerging ramps in the Tesla and Tegra product lines.
Interestingly, Tegra (which the Street has come to consider as a fiasco) is starting to become a growth engine for Nvidia in 2H10 in both smartphones and tablets. From a product portfolio perspective Nvidia is in a strong position with its Fermi architecture, and historically the company has shown a consistent ability to rebound off poor product transitions or adverse competitive dynamics.''
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