ON Semiconductor (NASDAQ: ONNN) designs and manufactures a wide variety of power and data management semiconductors for customers in the automotive, communications, computer, medical, industrial and military/aerospace markets. It operates a network of manufacturing facilities, sales offices and design centers in key markets throughout North America, Europe and the Asia Pacific region. Top clients include Nokia (NYSE: NOK) and Sony (NYSE: SNE). Texas Instruments (NYSE: TXN) is a major competitor.
The firm pleased investors last week, when it reported Q1 EPS of 21 cents and revenues of $421.9 million. Analysts had been looking for 14 cents and $386.9 million. Management also guided Q2 revenues to $545-$560 million ($400.6M consensus). Canaccord Adams subsequently upgraded the shares to "buy". Kaufman Brothers, Lehman Brothers and Wedbush Morgan reiterated their "buy" ratings.
Amkor Technology (NASDAQ: AMKR) is a leading provider of semiconductor assembly and test services. The firm offers semiconductor companies and electronics manufacturers a complete set of microelectronics manufacturing services, including die bonding, wire bonding, chip encapsulation, and verification of function, current, timing, and voltage. Clients include IBM (NYSE: IBM), Intel (NASDAQ: INTC) and Texas Instruments (NYSE: TXN).
The company surprised the Street last week, when it reported Q1 EPS of 36 cents and revenues of $699.5 million. Analysts had been looking for 26 cents and $684.3 million. The CEO attributed success to customer demand for wireless communications and networking applications. Management also guided Q2 EPS to 32-36 cents (28 cent consensus) and Q2 revenues to about $706-$720 million ($700.6M consensus).
Cymer (Nasdaq: CYMI) makes excimer light sources for manufacturers of photolithography tools in the semiconductor equipment industry. It offers field support products, customized to support chipmaker customers in their advanced wafer patterning processes. It also provides deep ultraviolet light sources to lithography tool makers, who integrate the sources into their wafer steppers and scanners for subsequent sale to chipmakers. Cymer has installed more than 3,000 light sources around the world, in plants run by the likes of Advanced Micro Devices (NYSE: AMD), IBM (NYSE: IBM), Intel (NASDAQ: INTC) and Texas Instruments (NYSE: TXN).
Investors were pleased earlier in the week, when the firm announced a $100 million buyback program and then issued a solid quarterly summary. Cymer reported Q1 EPS of 41 cents and revenues of $124 million. Analysts had been looking for 35 cents and $119.3 million. Management also said Q2 revenues would be comparable to the Q1 total of $124 million ($116.6M consensus) and that gross margins would hold at approximately 48%.
Texas Instruments (NYSE: TXN) reported Q1 numbers Monday after the bell, and I have to say that the report was OK in a relative sense -- nothing in it compelled me to want to do much of anything about the stock. The stock was off a little less than 2% in after-hours trading.
What drove the stock lower? Revenues didn't jump too high, rising 3% to $3.3 billion. Earnings per share, however, did rise by a pretty respectable amount -- they increased 40% to $0.49 per diluted share. It should be noted, though, that this figure included a $0.06 per share tax benefit.
In terms of expectations, Texas Instruments merely met them, according to Briefing.com, plus the company's outlook for the second quarter wasn't particularly robust -- the press release indicates a cautious tone in terms of its guidance on the part of management. Apparently, Texas Instruments believes the soft economy might keep growth potential firmly in check. Taken together, these stats seemed to have added up to a lower stock price. There were, however, some positive things to note in terms of the margins -- the gross and operating margins were up on a year-over-year basis.
Texas Instruments, which competes with Qualcomm (NASDAQ: QCOM), may not have really bombed with its Q1 report, but again, I don't think there's any reason for me to buy or short the company's stock. I think there are better ideas out there in the tech sector; I continue, for instance, to find Microsoft (NASDAQ: MSFT) a stock worth some due diligence.
Disclosure: I don't own shares in any of the companies mentioned; positions can change at any time.
Stock futures were mostly lower Tuesday morning after Texas Instruments gave a disappointing outlook and as investors awaited earnings from McDonald's, AT&T and other big caps as well as housing data.
U.S. stocks ended mixed Monday as oil prices hit new record highs and Bank of America reported a 77% profit decline. The Dow industrials losing 24 points, or 0.19%, and the S&P 500 down 2 points, or 0.16% while the the tech-heavy Nasdaq Composite rose 5 points, or 0.21%.
This morning investors will focus on March existing home sales reading. Economists forecast the pace of sales again fell in March despite showing a rise in February. That rise could have been attributed to the largest housing price drop and no one called a bottom to the housing crisis back then. The March data will show if indeed that was the beginning of a trend, but most likely it will show continued decline in the housing market.
With Texas Instruments' bleak outlook, much of today's trading will be swayed by the housing data, the outcome of earnings from the large companies as well as oil prices, which have already set a new record Tuesday of over $118 a barrel. Meanwhile retail gas prices reached over $3.50 a gallon.
U.S. futures are down this morning after Bank of America (NYSE: BAC) released disappointing figures for the quarter. The country's second-largest bank said net income plunged to $1.21 billion, or 23 cents a share, from $5.26 billion, or $1.16 a share, a year ago. Analysts had been expecting earnings of 41 cents a share.
Meanwhile, Merck (NYS: MRK) said first-quarter income jumped 94% to $3.3 million, or $1.52 a share, from $1.7 million, or 78 cents a share, a year earlier. Excluding a $1.4 billion gain from the AstraZeneca partnership and restructuring charges, Merck posted income of 89 cents a share. Worldwide sales climbed 1% to $5.8 billion, aided by the weak U.S. dollar.
Halliburton (NYSE: HAL) said Q1 earnings rose to $584 million from $552 million, while revenue increased to $4.03 billion from $3.42 billion, a year earlier. Elli Lilly reported earnings of $1.06 billion, or 97 cents a share, up from $508.7 million, or 47 cents. Analysts had expected somewhat better numbers from Lilly.
Despite a week of mixed earnings reports, the Dow, Nasdaq, and S&P 500 surged Friday, each ending the week up more than 4%. This is another big week of earnings reports, with Texas Instruments reporting today after the bell.
For nervous investors and analysts looking for good news on the earnings front, it's been a week of mixed blessings. However, judging by the expectations for the following ten so-called barometers of the U.S. economy, or important sectors of it, things could be looking up. All these companies are scheduled to report quarterly results next week (April 21 to April 25).
These first six companies are expected by analysts surveyed by Thomson Financial to post growth in profits in the most recent quarter, compared to the same period of last year:
Halliburton (NYSE: HAL), an oil services firm, is scheduled to report Q1 EPS on April 21. Bloomberg reported HAL may offer to buy Expro International Group to counter a bid from Candover Partners. HAL May option implied volatility of 37 is above its 26-week average of 33 according to Track Data, suggesting slightly larger price fluctuations.
Texas Instruments (NYSE: TXN) is scheduled to report Q1 EPS on April 21. TXN May option implied volatility of 34 is near its 26-week average of 32 according to Track Data, suggesting non-directional price movement.
Options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.
After hitting a one-year high of $39.63 in July, the stock hit a one-year low of $27.51 in March. This morning, TXN opened at $28.94. So far today the stock has hit a low of $28.29 and a high of $29.61. As of 12:10, TXN is trading at $28.55, down 1.06 (-3.6%). The chart for TXN looks neutral and improving, while S&P gives the stock a neutral 3 STARS (out of 5) hold rating.
For a bearish hedged play on this stock, I would consider a July bear-call credit spread above the $32.50 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make an 11.1% return in three months as long as TXN is below $32.50 at July expiration. TI would have to rise by more than 14% before we would start to lose money. Learn more about this type of trade here.
TXN hasn't been above $32.50 since January and has shown resistance around $30 recently. This trade could be risky if the company's earnings (due out on 4/21) are a positive surprise, but even if that happens, this position could be protected by resistance TXN might find at its 200 day moving average, which is currently around $32.50 and falling.
DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in TXN or NOK.
TheStreet.com's Jim Cramer says that absent any catalyst beyond "cheap," the sector looks set to disappoint.
When people say "tech" on TV, it is almost always followed with "cheap," or "low valuation." To which I say, "So what?" AMD (NYSE: AMD) (Cramer's Take) looked cheap until last night. Motorola (NYSE: MOT) (Cramer's Take) looked cheap and there turned out to be no there there. Cisco (NASDAQ: CSCO) (Cramer's Take) looks cheap but all I hear are earnings cuts. Dell (NASDAQ: DELL) (Cramer's Take) looks cheap, but who cares?
Lots of cheap out there.
Here's my question: where's the catalyst?
Shorts? Stronger growth in the second half? No, the only catalysts I look for in tech are product cycles, and other than Salesforce.com (NYSE: CRM) (Cramer's Take) (nice move there), Research in Motion (NASDAQ: RIMM) (Cramer's Take) and maybe Apple (NASDAQ: AAPL) (Cramer's Take), because we need a new phone there already, there are no new product cycles to speak of.
Tessera Technologies (NASDAQ: TSRA) is a leading provider of miniaturization technologies for the electronics industry. The firm develops and licenses a range of advanced chip packaging, interconnect, and optics solutions for the consumer, computing, communications, medical and defense electronics markets.
There was good news for Tessera investors late last month, when the U.S. International Trade Commission overturned a stay on a company patent infringement case against Motorola (NYSE: MOT), Qualcomm (NYSE: QCOM) and others. Tessera collects royalties on its chip packaging technologies from such companies as Intel (NASDAQ: INTC) and Sony (NYSE: SNE), but the defendants in this case have refused to pay the same. The case may now proceed, but an out-of-court settlement is possible. Tessera came to such an agreement in 2002, for example, with current customer Texas Instruments (NYSE: TXN). TSRA shares fell sharply in late February, when the stay was originally announced. Once it was lifted, Davenport upgraded the stock to "strong buy" status and declared a $35 price target.
A month ago, Intel Corp. (NASDAQ: INTC), introduced a new chip category, the Atom brand, specifically designed for mobile internet devices, or what Intel it calls MIDs. After missing out on the market for cellphone chips, Intel is trying to push this technology and will use a conference in Shanghai to proclaim it as the next big thing in consumer gadgets.
According to The Wall Street Journal, Intel also said "25 hardware companies have decided to make portable Internet devices using its latest chip technology" for gadgets that are smaller than a laptop but bigger than a smartphone. Apparently, the devices will start appearing in late May and early June on store shelves in China, Japan and South Korea. N.America and Europe distribution will come at a later date.
I find it fascinating that a new category of product is being pushed from the chip level rather than from the manufacturer level. But perhaps manufacturers are bound by chip capabilities and with the Atom, specifically designed to draw little power and thus conserve battery power, it makes sense.
As PDAs seem to have all but disappeared from the market, most of us these days rely heavily on our laptops and mobile devices, separating the functions of both, especially when travelling. One is more for email, the other more for work and browsing capabilities. A device that could potentially combine both may be exactly what is needed. At a $500 price tag, when an Apple Inc. (NASDAQ: AAPL) iPhone or a Research in Motion (NASDAQ: RIMM) BlackBerry costs nearly the same, this might just find its place among those on the move.
TheStreet.com's Jim Cramer says Tuesday's action addressed the systemic risk, but not the earnings problems.
Oh, shoot ... the fundamentals. Remember them? The ones not covered by Caterpillar's (NYSE: CAT) (Cramer's Take) rosy forecast for 2010? Yeah, those bits and pieces called earnings?
That's how I always feel after a big rally day when I know the economy is slowing, not getting better. We get some terrific news from the Fed as we did Tuesday, and we want to sound the all-clear. Instead we have to now deal with companies' earnings, and we know from Wellpoint (NYSE: WLP) (Cramer's Take) et al and Texas Instruments (NYSE: TXN) (Cramer's Take) et al that the Fed safety net doesn't take everything in with it.
So what did happen yesterday? After pondering it for seemingly every waking -- and sleeping! -- hour since it happened, I am thinking that yesterday's Fed move took off the systemic risk of a major financial failure.
and manufactures a wide variety of power and data management semiconductors for customers in the automotive, communications, computer, medical, industrial and military/aerospace markets. It operates a network of manufacturing facilities, sales offices and design centers in key markets throughout North America, Europe and the Asia Pacific region. Top clients include Nokia (NYSE: NOK) and Sony (NYSE: SNE). Texas Instruments (NYSE: TXN) is a major competitor.
Here are some highlights from this past week's 
Stock futures were mostly lower Tuesday morning after Texas Instruments gave a disappointing outlook and as investors awaited earnings from McDonald's, AT&T and other big caps as well as housing data.
For nervous investors and analysts looking for good news on the earnings front, it's been a week of mixed blessings. However, judging by the expectations for the following ten so-called barometers of the U.S. economy, or important sectors of it, things could be looking up. All these companies are scheduled to report quarterly results next week (April 21 to April 25).
Halliburton
A month ago, 
Just how high will U.S. gasoline prices rise?
Nordstrom and Kohl's post smaller-than-expected Q1 profit declines
Oil hits record $127.43 on supply concerns, raised Goldman forecast
