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Thursday, April 23, 2009

Quick earnings recap – 4/23/09

VMWare (VMW) missed on license revenues and guided for down sales y/y in Q2.  Estimates will need to drop ~10%.  Stock has been running up on takeover speculation by Cisco.  Both VMW and Citrix (CTXS) are likely takeover candidates as enterprise software companies continue to push into application hosting.

EMC missed estimates by 100 mil on the top line.  Guidance of … er … there’s no guidance.  IT spending will be down 9-12% (high single/low double digits) for 2009, according to the company.  Company indicates operating profits will be better in the second half relative to the first quarter – by virtue of omission, the second quarter will show no improvement or be worse than the first.  Still think IBM should buy these guys – especially since they own that big hunk of VMW.

Lam Research (LRCX) and Novellus (NVLS) both indicated a near-term bottom has been found in semicap.  Novellus guided up 20-50% for next quarter – it sounds like a lot but last quarter they were down ~35% from the one before that.  We’re really talking about 3 quarters of flat with a pothole last quarter.  Novellus is hopeful the second half will be stronger than the first.  Lam stuck to their forecast of equipment sales down 50% for 2009.  Breakeven levels have been reduced, they’re losing less money at this revenue level than they were two quarters ago and foundry orders have been trickling in for the first time in a while.  Memory companies are only spending reluctantly despite a 100% rise in component prices.  It’s hard to get very negative on them with companies setting expectations so low.

Xilinx (XLNX) came in at the high end of their lowered forecast without the big margin dip Altera (ALTR) had.  They guided to 2-4% growth for next quarter, which will move consensus up ~5%.  I remain skeptical of the China 3G build sustainability.

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