Investor Enthusiasm For Graphene: Strong As Graphene
Update: A Buy, A Sell, And 2 Holds In The LED Sector
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Weak Earnings Add To Spectacular Short Case For SemiLEDs
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Thu, Sep. 11, 9:14 AM
Mon, May. 5, 4:24 PM
- Though it beat Q1 estimates, Veeco (VECO) expects Q2 revenue of $87M-$97M and EPS of -$0.23 to -$0.14, largely below a consensus of $96.8M and -$0.11.
- Q1 orders totaled $103M, up 21% Q/Q and 47% Y/Y, and above revenue of $90.8M. MOCVD equipment orders rose 59% Q/Q to $83M thanks to rising demand from LED manufacturers in Asia and elsewhere. Data Storage orders fell to $15 from $22M in Q4, and MBE orders fell to $5M from $11M.
- Veeco asserts LED fab utilization rates "have improved to high levels at most key accounts and LED adoption is happening faster than many had expected." But it also cautions MOCVD orders could be "lumpy and unpredictable on a quarterly basis," and that the company lacks 2H visibility. Q2 orders are expected to be at or above Q1 levels.
- Rival Aixtron (AIXG), which moved higher last week following its Q1 report, might follow Veeco lower.
- Q1 results, PR
Tue, Apr. 29, 2:43 PM
- Though Aixtron (AIXG +2.3%) missed Q1 estimates, it reiterated guidance for 2014 revenue to be flat Y/Y. Earnings are expected to improve from 2013 levels, but an EBIT loss is still forecast.
- In addition, the LED equipment maker's orders 2% Q/Q and 26% Y/Y in Q1 to €37.7M. Quarter-ending backlog was €64.2M, -18% Y/Y but +8% Q/Q.
- Gross margin was 25% - down from seasonally strong Q4's 34%, but much better than the year-ago period's -119% (no typo).
- The company notes capacity utilization among LED customers "remains at relatively high levels" amid growing demand, and thinks "sentiment among customers is improving as the growth in the LED market drives the customers' profitability." At the same time, it observes "there was still no noticeable increase in investments in LED manufacturing capacity expansions" in Q1.
- Rival Veeco (VECO +2.5%) and LED wafer vendor Rubicon (RBCN +1.2%) are higher on a good day for tech. Rubicon reports on Thursday, and Veeco on May 5.
- Q1 results, PR
Fri, Mar. 28, 2:40 PM
- Checks suggest Rubicon's (RBCN +2.3%) Chinese sales are up 30% in Q1, writes UBS' Stephen Chin, while upping his PT to $12 from $9.50.
- Chin also estimates Rubicon's ASP for 2" sapphire wafers is up 9% Q/Q, and says UBS' China LED tracker "continues to show that fab utilization rates in China are tracking in low 90s and Chinese LED fabs are likely placing rush MOCVD equipment orders."
- At the same time, he cautions sapphire "is still in 10-15% oversupply," and estimates Rubicon's Malaysian sapphire wafer-polishing factory has a 10%-20% utilization rate due to weak demand for larger wafers. Chin, who maintains a Neutral, thinks Rubicon won't reach operating breakeven until 2015.
- Chin's remarks about MOCVD equipment orders bode well for Veeco (VECO +5.9%) and Aixtron (AIXG +2.7%). The former was upgraded by CLSA this morning, and by UBS 18 days ago.
- Also: AppleInsider is reporting Apple and GT Advanced are looking to expand their new Arizona sapphire production facility. Rubicon shares jumped after Apple's deal with GT was announced last fall, as investors bet the deal would lead to a more favorable sapphire supply/demand balance.
Tue, Mar. 11, 9:46 AM
- Vipshop (VIPS -4.1%) has been cut to Neutral by Goldman. Shares blasted off last week in response to the company's Q4 beat and strong guidance.
- Unisys (UIS -6.5%) has been cut to Market Perform by Raymond James.
- Aixtron (AIXG -1.6%) has been cut to Neutral by BNP Paribas.
- As part of a chip sector coverage launch, AppliedMicro (AMCC +1%), TowerJazz (TSEM +1.5%), Neonode (NEON +1.6%), RF Micro (RFMD +1.8%), and TriQuint (TQNT +1.6%) have been started at Buy by Ascendiant Capital.
Wed, Jan. 22, 2:35 PM
- Though its FQ3 guidance is only in-line, investors are giving a resounding thumbs-up to Cree's (CREE +7.7%) FQ2 report, given it featured solid revenue and earnings beats on the back of strong LED lighting growth, and signs the margin pressure lately faced by the company could be softening.
- LED wafer supplier Rubicon (RBCN +5%) is also up sharply, as are equipment vendors Veeco (VECO +6.5%) and Aixtron (AIXG +4.6%).
- Cree's lighting product sales rose 42% Y/Y in FQ2 (a pickup from FQ1's 37% growth), and now make up 42% of the company's revenue (up from 38% in FQ2). Just as importantly, Cree's lighting gross margin, hurt lately by aggressive pricing for consumer LED bulbs at Home Depot and elsewhere, rose 100 bps Q/Q to 27.9% (albeit while falling 580 bps Y/Y).
- LED product sales (components) rose 7% Y/Y after growing 16% in FQ1, and now make up 52% of revenue (down from 56%). Gross margin was 45.4%, -120 bps Q/Q but +350 bps Y/Y. Power/RF product sales rose 17% Y/Y, and carried a 58% gross margin (+430 bps Q/Q and +140 bps Y/Y).
- Goldman (Buy) thinks Cree's numbers demonstrate LED lighting adoption is "in the early innings," and believes its guidance "implies a return to 30%+ gross margin in lighting after several disappointing quarters." The firm is also pleased sell-through at Home Depot doubled Q/Q, and considers Cree well-positioned for "a potentially break-out June."
- Needham (Hold) is more cautious. It's worried a mix shift towards bulbs will keep margins pressured, notes capacity constraints are limiting sales of high-margin LED components, and considers Cree "fairly valued" at 29x 2015E EPS.
- CC transcript
Nov. 8, 2013, 11:33 AM
- Though Veeco (VECO -3.1%) beat Q3 revenue estimates (while missing EPS forecasts), its bookings for the quarter only totaled $92M. While that figure is up from depressed Q2 and year-ago levels of $85M and $84M, it fell short of Q3 revenue of $99.3M, and yielded a book-to-bill of just 0.93, below a 1H level of 0.97.
- Orders for Veeco's MOCVD systems (used in LED/solar manufacturing) rose 28% Q/Q to $67M. However, orders for MBE and hard drive equipment respectively fell to just $7M and $18M. In spite of the Q/Q order pickup, Veeco says it hasn't yet seen an MOCVD demand recovery.
- Gross margin was 30.5%, down from 37.5% a year ago. While revenue fell 25% Y/Y, opex declined 5%.
- Rival Aixtron (AIXG -2.4%) is also selling off.
- Previous: Veeco files delayed reports, shares jump
Oct. 21, 2013, 10:04 AM
- SolarCity (SCTY +7.3%) has been started at Buy by BofA/Merrill.
- Salesforce (CRM +2.1%) has been upgraded to Strong Buy by Raymond James.
- Activision (ATVI +1%) has been started at Overweight by Barclays.
- MA-Com (MTSI +2.7%) has been upgraded to Overweight by Stephens.
- Russian carriers VimpelCom (VIP -0.5%) and MTS (MBT -1.8%) have been cut to Hold by Deutsche, and so has Aixtron (AIXG +3.2%)
- NII Holdings (NIHD -4.3%) has been cut to Underperform by Credit Suisse.
- Celestica (CLS -1.4%) has been cut to Hold by Canaccord.
- Aruba (ARUN +1.7%) has been started at Outperform by Northland.
- Applied Optoelectronics (AAOI +10.9%) has been started at Strong Buy by Raymond James.
- Xoom (XOOM +6.9%) has been started at Buy by SunTrust.
- Montage (MONT -0.4%) has been assigned five bullish ratings, and no neutral/bearish ones, on underwriter coverage day.
Oct. 15, 2013, 2:09 PM
- Oppenheimer's Andrew Uerkwitz, who downgraded Veeco (VECO -5.3%) to Perform this morning, says he's concerned about the "potential fallout" from Veeco's accounting review, which has been ongoing for nearly a year.
- Moreover, after updating his financial statements, Uerkwitz thinks the "earnings correction" that will be provided by Veeco when it finally reports will be worse than previously thought.
- LED equipment peer Aixtron (AIXG -1.3%) is off moderately. Canaccord cut Aixtron to Sell at the beginning of the month, citing Asian share losses.
Oct. 1, 2013, 11:14 AM
- In tandem with upgrading top LED lighting/component supplier Cree, Canaccord's Jonathan Dorsheimer has downgraded equipment vendor Aixtron (AIXG -4.4%) to Sell. Meanwhile, Oppenheimer has cut LED sapphire wafer supplier Rubicon (RBCN -3.5%) to Underperform.
- Dorsheimer says Asian supply chain meetings give him "increased confidence that [Aixtron] has lost significant share and that the next MOCVD cycle will likely disappoint."
- It's possible some of the share lost by Aixtron has been picked up by rival Veeco (VECO +2.4%). However, both Aixtron and Veeco have been contending with tough price competition from Chinese vendors.
- Oppenheimer bases its Rubicon downgrade on a belief the LED sapphire market will remain in a state of oversupply (previous), and that non-LED applications won't be able to pick up the slack. The firm also views recent wafer price hikes as unsustainable.
Aug. 6, 2013, 11:03 AM
- GT Advanced (GTAT +12.5%) is at levels last seen in Sep. '12 after beating Q2 EPS estimates on the back of strong Q/Q gross margin growth, and reiterating 2013 guidance.
- Sapphire wafer vendor Rubicon (RBCN +1.9%) is up in sympathy, and so is LED/solar equipment vendor Aixtron (AIXG +0.1%).
- In prepared remarks, GT states "end-market conditions are improving" in the LED equipment space, and that Asian advanced sapphire furnace clients are running at 80% utilization. GT also says it [continue] to make progress ... in developing [its] sapphire business beyond the LED market."
- Sapphire is seen as "the key driver of GT's overall business" through 2014.
- Though orders remain light, GT claims to have "very good visibility" for its solar polysilicon equipment ops for 2H, and is upbeat about stabilizing prices and tightening supply.
- GT is also optimistic long-term about its new silicon carbide (SiC) furnace, which (together with GT's Hyperion tech) the company claims can yield cheap substrates for power semiconductors.
- PR, earnings slides
Jul. 29, 2013, 4:53 PM
- Q2 bookings totaled $85M, +21% Q/Q but -17% Y/Y. (PR)
- LED/solar bookings (mostly MOCVD systems) totaled $58M vs. $43M in Q1 and $77M a year ago. Hard drive equipment bookings totaled $27M, even with Q1 but down from $50M a year ago.
- MOCVD shipments were up Q/Q; MBE and hard drive equipment shipments were flat.
- Veeco (VECO) says MOCVD market signals are "mixed," with higher Asian utilization rates, LED industry optimism, and strong LED lighting demand offset by customer caution about capacity expansion.
- More MOCVD quotes are being requested, but conversion times are long, and quarterly bookings dependent on major deals.
- Hard drive equipment customers are also cautious, but Veeco thinks sales could rise later this year thanks to slowing areal density growth (leads to more heads/media per drive).
- No full Q2 report thanks to Veeco's ongoing accounting review.
- GT Advanced (GTAT) and/or Aixtron (AIXG) could move in sympathy.
May. 29, 2013, 1:41 PMVeeco (VECO +3.3%) rallies after UBS raises its estimates and PT, citing expansion plans from the company's top Chinese customer. The report might also be giving a lift to LED wafer vendor Rubicon (RBCN +3.3%). Veeco and rival Aixtron (AIXG -1.2%) sold off last month on a report the companies have drastically cut prices for LED manufacturing gear due to Chinese competition. Shares sold off more moderately in early May on a report the Shenzhen, China government is ending an LED manufacturing incentive plan. | 1 Comment
May. 2, 2013, 10:28 AMVeeco (VECO -2.8%), Aixtron (AIXG -1.3%), and Rubicon (RBCN -0.7%) slump after the Shenzhen, China government reportedly ends a 7-year, $21B LED incentive plan that helped make the city China's LED manufacturing capital. Notable Calls observes sell-side firms have named Chinese subsidy cuts as a risk for Veeco (I, II, III). Shares might also be pressured by GT Advanced's (GTAT -7.3%) revenue miss and light 2013 guidance - GT only saw $16.6M in new orders in Q1, and removed $356M worth of sapphire furnace orders from its backlog that considers at-risk. (LED equipment price cuts) | Comment!
Apr. 23, 2013, 10:20 AMStorage/hard drive stocks are outperforming, possibly aided by Veeco's Q1 bookings numbers: the company reported hard drive equipment bookings totaled $27M, down 7% Y/Y but up 60% Q/Q in spite of slumping PC demand. Veeco added on its CC (transcript) hard drive customers are "starting to make selective technology buy decisions" once more. STX +2.6%. WDC +2.6%. EMC +1.8%. NTAP +2.7%. XRTX +1.6%. QTM +5.1%. EMC reports tomorrow morning. Also, LED/solar equipment makers Aixtron (AIXG +9%) and GT Advanced (GTAT +2.7%) are getting a lift from Veeco's numbers and bullish Q2 commentary. | 2 Comments
Apr. 22, 2013, 4:27 PMVeeco (VECO) +8.6% AH after providing a Q1 business update that was better than feared. Bookings for the quarter totaled $70M, down 24% Q/Q and 38% Y/Y. LED/solar bookings amounted to $43M, -49% Y/Y, while hard drive equipment bookings fell 7% to $27M. The company's cash balance rose by $9M Q/Q to $588M. Veeco, whose earnings reports have been delayed as it does an accounting review, says MOCVD end market signals "are mixed but appear to be trending in a positive direction," with some LED customers operating at close to full capacity. Aixtron (AIXG) could rally in sympathy. (Q4 bookings) | 4 Comments
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Aixtron SE is a provider of deposition equipment to the semiconductor industry. The Company's technology solutions are used by customers to build advanced components for electronic and optoelectronic applications.
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