Liste Newsletter

Index Performances
EPITEX, EPITA’S INDEX, Dec. 9, 2004: 81.89 (EPITEX set at 100 on Aug. 31, 2001)

News

MARKET FOCUS

U.S. stocks ended in the plus column on Thursday as National Semiconductor’s earnings beat the Street, rekindling a more positive sentiment for the sector.

This came on the heels of several chipmakers issuing bearish assessments of the current quarter. Programmable chipmakers Xilinx and Altera lowered their sales outlook while Texas Instruments lowered the top of the range for its financial projections.

Also contributing to a somewhat firm tone in the market was the U.S. dollar, which managed to hold for a second straight session above its record low set against the euro at $1.3469 on Tuesday.

This helped offset news that initial claims for unemployment benefits rose 8,000 to 357,000 in the latest reporting week. This number is consistent with sluggish job creation.

OUTLOOK

The market will watch the PPI index for wholesale inflation in November, with analysts expecting a mere 0.1 percent increase.

THE NUMBERS

The Dow Jones Industrial Average gained 58 points, or 0.5 percent, to 10,552. The Nasdaq composite index added 2 points, or 0.1 percent, to 2,129 while the Nasdaq-100 index of large capitalization tech and biotech stocks ended up 0.4 percent at 1,609.

Profile

Programmable chipmaker Xilinx said strong sales in October were followed by weaker-than-expected turns bookings across all geographies in November.

Although turns bookings have increased in the first week of December, this strength is not expected to continue, due to normal seasonality experienced during the holidays.

As a result, Xilinx is now expecting sales to decrease 5 percent to 8 percent sequentially in the December quarter. This is lower than prior guidance of down 2 percent to down 6 percent sequentially.

As a result of lower revenue levels, inventory days at Xilinx and distribution are expected to be approximately 170 days, up from prior guidance of 156 days.

Meanwhile, rival Altera similarly cut its fourth-quarter sales target to reflect a sequential decline of 9 to 12 percent compared with a previously targeted decline of 1 to 5 percent.

Altera’s new sales targets now are in a range of $232.8 million to $240.8 million, down from an earlier range of $251.4 million to $262 million.

Inventory is also expected to rise for the programmable microchip manufacturer, to four months vs. an expected range of 3.3 months to 3.7 months.

Altera cited high inventories and weak demand for wireless and networking access products, especially in Japan and Europe; declines in demand for communications and storage products while industrial sales should pick up.