Bear Stearns Cautions Investors On Xilinx, Altera; Sees Weakening PLD Market

Includes: INTC, XLNX
by: Eric Savitz

Gurinder Kalra, an analyst at Bear Stearns, Friday warned that he sees “weakening momentum” in customer orders for programmable logic device makers Xilinx (NASDAQ:XLNX) and Altera (NASDAQ:ALTR) in May compared to April and March.

Kalra advised investors to “consider lightening up” on both stocks, “based on incrementally negative data points coming out of our recent channel checks.”

Kalra sees several areas of concern. He says the order weakness is coming “mainly from the communications market” - in particular wireless infrastructure - “and Japan,” but that he also expects orders from European distributors “to be weaker than normal during the summer months.”

Kalra trimmed his March 2008 EPS estimate to $1.23 a share from $1.28; for ‘09 he goes to $1.51 from $1.55. His already below-consensus Altera estimates remain unchanged.

XLNX vs. ALTR 1-yr chart:
xlnx altr chart

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